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On Friday, the Education Department announced it would automatically cancel student loans for more than 800,000 borrowers. This comes after last month’s Supreme Court ruling against President Joe Biden’s student loan forgiveness plan. Here’s what the new announcement means, how to check if you’re eligible for relief, and how to claim it.
Who is Eligible for Loan Forgiveness?
This recent loan forgiveness announcement applies to long-time borrowers on income-driven repayment plans. Unlike standard loans, income-driven repayment plans are based on a borrower's income rather than the loan amount. This adjustment is essentially a one-time correction for borrowers who were left out due to previous payment count discrepancies, as stated by Education Secretary Miguel Cardona.
If you're a borrower on an income-driven repayment plan and have made at least 20 years of payments, you should see your remaining loan balance forgiven in the next few weeks.
How to Check Your Debt Relief Status
Eligible borrowers started receiving notifications on July 14. If you qualify for this forgiveness, your loan balances should be automatically discharged or reduced in the coming weeks. This announcement specifically targets those on income-driven repayment plans who have made two decades of payments but have still struggled to eliminate their debt.
For the millions of borrowers not enrolled in income-driven repayment plans, here’s our guide to organizing your repayment plan and considering other loan forgiveness opportunities that may still be available.
