Which student loans qualify for forgiveness under Biden's plan?

Which student loans qualify for forgiveness under Biden’s plan?

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  • Only US government loans are eligible for Biden’s $10,000 forgiveness plan.
  • Private loans, as well as some FFEL and Perkins loans, are not eligible for forgiveness.
  • To qualify for forgiveness, FFEL and Perkins loan borrowers can consolidate into a direct loan.

On August 24, President Biden announced that he would forgive $10,000 in student loans per borrower, $20,000 if they received a Pell Grant.

To qualify for student loan forgiveness, you must meet the following income requirements:

  • Annual income of $125,000 or less for individuals
  • Annual income of $250,000 or less for married couples filing jointly

However, some people may miss out on student loan forgiveness simply because they have the wrong type of loan.

Student loan expert Sonia Lewis, who has worked with more than 20,000 clients to help them navigate their student loans through Student Loan Doctor LLC, says most people don’t know their loan type in the first place. “The first thing you’ll want to do,” she tells Insider, “is log in to studentaid.gov and click ‘see details.’ Your loan type will be right above the green circle.”

If you can’t remember whether or not you received a Pell Grant, Lewis says the information can be found on the same dashboard on studentaid.gov. “If you see two circles, a blue circle and a green circle, that means you received a Pell Grant and you’re receiving $20,000.”

A sample screenshot of the control panel for the Federal Student Aid website.

If you see two circles, one blue and one green, on your student aid website, you received a Pell Grant and are eligible for $20,000 student loan forgiveness.

StudentAid.gov



Here is a list of all the different types of loans, and whether or not they qualify for student loan forgiveness.

What loans qualify for student loan forgiveness?

Generally, student loans held by the US government are eligible for forgiveness.

Types of student loans that qualify for forgiveness

  • Undergraduate and Graduate Direct Loans
  • Parent PLUS Loans
  • Direct PLUS loans made to graduate and professional students
  • Consolidation loans (with underlying loans disbursed on or before June 30, 2022)
  • FFEL loans held by the Department of Education
  • Perkins Loans held by the Department of Education
  • Delinquent loans (including Subsidized Stafford, Unsubsidized Stafford, Parent PLUS and Graduate PLUS loans from the Department of Education or with commercial services, and Perkins loans from the Department of Education)

Servicers who service student loans held by the US government.

  • Federal Loan Servicing (PHEAA)
  • Great Lakes Education Loan Services, Inc.
  • edfinancial
  • A model
  • help advantage
  • netnet
  • OSLA Service
  • LEAVE
  • Default resolution group

If your loans are serviced by servicers not listed above, they are privately owned.

What loans do not qualify for student loan forgiveness?

Private FFEL Loans

Some FFEL loans are federally backed loans issued by a private lender. Because they are held by a private lender and not the US government, they are not eligible for student loan forgiveness. The Biden administration is working to grant forgiveness for all private FFEL loans, but there is no timeline yet.

If you have private FFEL loans, you must consolidate your FFEL loans into a direct loan to qualify for Biden’s student loan forgiveness plan.

However, the US government does hold other FFEL loans, and they are eligible for $10,000 forgiveness, $20,000 if you received a Pell Grant. If you have FFEL loans and they are currently on hold due to the pandemic, they qualify for forgiveness.

Perkins Loans

Perkins Loans are low-interest loans for undergraduate and graduate students who exhibited exceptional financial need, and were discontinued in 2017. Lewis says, “These loans would be repaid to the actual university, not the government. So the school was able to to issue the loan through government financed money.

Because Perkins loans are repaid to schools and not the federal government, they are not eligible for Biden student loan forgiveness. You can consolidate your Perkins loans into a direct loan to receive full forgiveness, but that may not be the best plan for you because Perkins loans are fully forgiven after five years of full-time work in the following occupations:

  • Teacher in a public or nonprofit school (some part-time teaching jobs qualify for forgiveness)
  • Nurse or medical technician
  • Qualified professional provider of early intervention services for the disabled
  • Faculty member at a tribal college or university
  • Speech pathologist with a master’s degree working in a Title I eligible elementary or secondary school
  • Librarian with a master’s degree working in a Title I eligible school
  • Law enforcement or correctional officer
  • Attorney employed by a federal public or community defense organization
  • Employee of a public or private nonprofit child or family services agency serving high-risk children and their families from low-income communities
  • Staff member in the educational component of a Head Start program
  • Staff member in the educational component of a pre-K or child care program that is licensed or regulated by a state
  • Military service in the U.S. Armed Forces in a hostile fire or imminent danger pay area
  • Cancellation of AmeriCorps VISTA or Peace Corps volunteers

Private Student Loans

Private loans held by commercial lenders are not eligible for Biden’s student loan forgiveness plan. Also, if you refinanced your federal student loans with a private lender, those loans are no longer eligible for Biden’s student loan forgiveness plan.

How to know what type of loans you have

To find out what type of loans you have, log on to studentaid.gov and click on “My Aid” in the drop-down menu.

From there, refer to the “Loan Breakdown” section for a list of your loans. Click “View Loans” and then “View Loan Details.” Review the names of your loans and look for “Direct”: Those loans are eligible for forgiveness.

If you have FFEL or Perkins loans with “Dept. of Ed” or “Default Management Collection System” as the servicer name, your loans are owned by the federal government and are eligible for forgiveness.

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