What Is Obama Student Loan Forgiveness? (2024)

FAQs

Has anyone actually gotten student loan forgiveness? ›

Since the White House made changes to PSLF, about 871,000 Americans have received student loan forgiveness through the program, the Biden administration said.

Today's announcement brings the total loan forgiveness approved by the Biden-Harris Administration to $153 billion for nearly 4.3 million Americans.

To date, the Biden-Harris Administration has approved $146 billion in student debt relief for 4 million Americans through more than two dozen executive actions. That includes fixing Public Service Loan Forgiveness and Income-Driven Repayment plans, so borrowers finally get the relief they are entitled to under the law.

In total, the Administration has now approved debt cancellation for nearly 3.9 million hard-working Americans totaling almost $138 billion in relief. Many of these borrowers planned their lives and families around the promise of forgiveness through programs such as Public Service Loan Forgiveness (PSLF).

If you have loans that have been in repayment for more than 20 or 25 years, those loans may immediately qualify for forgiveness. Borrowers who have reached 20 or 25 years (240 or 300 months) worth of eligible payments for IDR forgiveness will see their loans forgiven as they reach these milestones.

Your student loan servicer(s) will notify you directly after your forgiveness is processed. Make sure to keep your contact information up to date on StudentAid.gov and with your servicer(s). If you haven't yet qualified for forgiveness, you'll be able to see your exact payment counts in the future.

If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt relief. If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt relief.

“Errors, even as minor as spelling mistakes, can cause rejections. For PSLF for example, borrowers must thoroughly fill out an Employer Certification Form (ECF) with all of their previous employers, their Federal Employer Identification Numbers, tax status, and other details.

The Public Service Loan Forgiveness (PSLF) program is a United States government program that was created under the College Cost Reduction and Access Act of 2007 signed into law by President George W.

Starting in July 2024, payments for borrowers with only undergraduate student loans will be cut in half. Those monthly payment amounts are currently calculated to be 10% of your discretionary income, but in July 2024 that number will drop to only 5% of your discretionary income.

Are student loans being cancelled? ›

Many student loan borrowers have an opportunity to have their entire student loans cancelled or receive more credit towards cancellation, but they must act before April 30, 2024. Many student loan borrowers have an opportunity to receive full student loan cancellation or more credit towards cancellation.

If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.

The U.S. Department of Education's COVID-19 relief for student loans has ended. The 0% interest rate ended Sept. 1, 2023, and payments restarted in October. Never made student loan payments before? Learn what's involved and how to get ready.

According to the IRS, student loan amounts forgiven under PSLF are not considered income for tax purposes. Learn more about the PSLF process. You won't be taxed by the federal government, but your state may tax you. Any debt forgiven as a result of PSLF won't create a federal tax liability for you.

Today, my Administration approved debt cancellation for another 74,000 student loan borrowers across the country, bringing the total number of people who have gotten their debt cancelled under my Administration to over 3.7 million Americans through various actions.

In most cases, you'll get a refund for any overpayments beyond 20 or 25 years. The extra payments made on forgiven loans will be refunded back to the most recent of these three dates: The date you reached the required number of payments for IDR forgiveness – 20 or 25 years of monthly bills.

You're not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.

If you made payments and paid off your federal student loans during the federal payment freeze—or reduced your balance to less than the forgiveness amount—you can get a refund of your payments to maximize the value of this forgiveness opportunity.