Borrowers may apply now for Student Debt Relief

In late August 2022, President Biden announced a Student Debt Relief Plan that would provide eligible borrowers with full or partial discharge of up to $10,000 in student debt, and up to $20,000 for Federal Pell Grant recipients.

Eligible borrowers may now apply for debt relief at

Eligible borrowers that apply today (and no later than Dec. 31, 2023) will have their applications reviewed by the U.S. Department of Education (ED) to confirm eligibility and will be contacted if more information is required. If debt relief is granted, the borrower’s loan servicer will her/him/them when relief has been processed.

To be eligible, a borrower must have made less than the required income to file federal taxes or filed federal taxes in 2020 or 2021 with an adjusted gross income (AGI) less than:

  • $125,000 for Single, or Married filing 
  • $250,000 for Married filing jointly, Head of household, or qualifying widow(er)

An eligible borrower must have at least one of the following types of federal student loans disbursed (when you received your loan funds) on or before June 30, 2022:

  • William D. Ford Federal Direct Loan (Direct Loan) Program loans
  • Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
  • Federal Perkins Loan Program loans held by ED
  • Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, graduate PLUS; and Perkins loans held by ED)

This means that subsidized loans, unsubsidized loans, parent PLUS loans, and graduate PLUS loans held by ED are eligible. Consolidation loans are also eligible for relief, as long as all of the underlying loans that were consolidated were ED-held loans and were disbursed on or before June 30, 2022.

Additionally, consolidation loans comprised of any FFEL or Perkins loans not held by ED are also eligible, as long as the borrower applied for consolidation before Sept. 29, 2022.

What else should borrowers be aware of:

  1. Your loans are still active. Until your loan servicer says that a loan has been fully or partially discharged, it is your responsibility to continue making at least the minimum required payment each month. The federal student loan payments freeze is scheduled to end on 12/31/2022, so many borrowers will have payments due starting January 2023. Late payments and missed payments can make you liable for penalties, and fees, and can have an adverse effect on your credit score.
  2. You may owe taxes at the state level. One-time student loan debt relief won’t be taxed at the federal level; however, some states may be taxing this debt relief, so check with your state of residence for the latest information.
  3. You are not required to accept debt relief. You may opt out of debt relief by contacting your loan servicer by email or by phone.
  4. You might not be entitled to keep refunded payments made by your employer. If you participated in a taxable student loan repayment plan during 2020, 2021, or 2022, any refunded payments should have already been taxed on payroll and would be yours to keep. However, if you participate(d) in a tax-free student loan repayment plan during 2020, 2021, and/or 2022, you agreed to abide by the terms of your employer’s policy which state, among other things, that “eligible employees may not choose between educational assistance benefits and any other taxable compensation (whether cash or non-cash)”. Therefore, if you receive a refund for contributions made by your employer between 3/12/20 and 12/31/22, you may be required to repay those funds to your employer and/or you may be liable for income taxes and social security tax withholding on this income. Any refunds received by Peanut Butter will be returned to the employer that contributed to the loan.

Additional information about One-time Federal Student Loan Debt Relief is available from the Department of Education (ED) at