Student loan forgiveness: 30M borrowers will get email about possible debt relief

If you have federal student loans, you may want to check your email — you may be eligible for possible debt relief.

The Biden-Harris administration recently announced it will begin the next step toward providing student debt relief to tens of millions of borrowers this fall. Starting Thursday, the U.S. Department of Education will begin emailing all borrowers with at least one outstanding federally held student loan to provide updates on potential student debt relief. The email will also notify them they have until Aug. 30 to call their servicer and opt out if they don’t want this relief.

The rules that would provide this relief aren’t yet finalized, and the email won’t guarantee specific borrowers will be eligible.

The department will provide additional information to borrowers once the rules are finalized in the fall. These proposed rules build upon existing work that has approved more than $168 billion in student loan relief for nearly 4.8 million borrowers.

If finalized, these rules would bring the total number of borrowers eligible for student debt relief to over 30 million — including borrowers who have already been approved for debt cancellation under the current administration over the last three years.

“These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others,” said U.S. Secretary of Education Miguel Cardona.

If rules are finalized as the department has proposed, they would allow partial or full debt relief for the following groups:

• Borrowers who owe more now than they did at the start of repayment. Borrowers would be eligible for relief if they have a current balance on certain types of federal student loans that is greater than the balance of that loan when it entered repayment due to runaway interest. The department estimated that this debt relief would impact nearly 23 million borrowers, the majority of whom are Pell Grant recipients.
• Borrowers who have been in repayment for decades. If a borrower with only undergraduate loans has been in repayment for more than 20 years (entered repayment on or before July 1, 2005), they would be eligible for this relief. Borrowers with at least one graduate loan who have been in repayment for more than 25 years (entered repayment on or before July 1, 2000) would also be eligible.
• Borrowers who are otherwise eligible for loan forgiveness but have not yet applied. If a borrower hasn’t successfully enrolled in an income-driven repayment (IDR) plan but would be eligible for immediate forgiveness, they would be eligible for relief. Borrowers who would be eligible for closed school discharge or other types of forgiveness opportunities but haven’t successfully applied would also be eligible for this relief.
• Borrowers who enrolled in low-financial value programs. If a borrower attended an institution that failed to provide sufficient financial value, or that failed one of the department’s accountability standards for institutions, those borrowers would also be eligible for debt relief.

The department is able to automatically assess a borrower’s eligibility for the benefit. More information for borrowers about this debt relief is available at StudentAid.gov/debt-relief.

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