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Federal Student Loan Cancellation Information

The U.S. Department of Education is providing targeted debt relief to borrowers who meet certain criteria. 

There are still many details that we do not know related to debt cancellation. We will keep this resource page up to date with the information you need to know in order to receive relief.

The Student Loan Debt Relief Plan

Forgiving Debt

$20,000 if you went to college on Pell Grants $10,000 if you didn’t receive Pell Grants
Forgiveness only applies to those earning less than $125,000
Student loan pause extended one final time through Dec 31, 2022

Payment Based on Income

If you have undergraduate loans, you can cap repayment at 5% of your monthly income

How do I know if I am eligible for debt cancellation?

  • Visit this helpful guide that explains One-Time Student Loan Debt Relief specifics.
  • To be eligible, your annual income must be below $125,000 (for individuals) or $250,000 (for married couples or heads of households).
  • If you filed a 2021-2022 FAFSA and were a dependent student, the amount of the relief will be based on your parent’s income as reported on your FAFSA.
  • If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation (log in with your FSAID at studentaid.gov to see if you have ever received a Pell Grant. Current students can also check their Wabash self-service).
  • 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 cancellation.

What loans are covered?

  • Any loan held by the US Department of Education is eligible for relief. This includes direct subsidized & unsubsidized, Graduate PLUS, and Parent PLUS loans.
  • Federally held loans must have been first disbursed before June 30, 2022 to be eligible.
  • Check with your servicer if you have borrowed a FFELP, Perkins, or HEAL loan. There are other determining factors that will decide if that loan is eligible for relief.
  • Wabash College Subsidized Loans are not eligible. Wabash only offered these loans from 2008-2019.
  • Private Student Loans held by private banks or lenders are not eligible.
  • When in doubt, contact your servicer.

Next Steps for Loan Forgiveness

1

A simple application will launch by early October

2

Once completed, borrowers can expect relief within 4-6 weeks

3

Fill out application before Nov 15th to receive relief before payment pause ends

Sign up at StudentAid.Gov/DebtRelief to be notified when application is available

What else do I need to know?

  • 8 million borrowers may be eligible for automatic relief because the U.S. Department of Education already has relevant income data (filed a FAFSA for 2021-2022).
  • Applications will be processed as they are received, even after the pause expires on December 31, 2022.
  • The payment pause has been extended one final time through December 31, 2022, with payments resuming in January 2023.
  • You do not need to do anything to have the pause extended. This will happen automatically for all borrowers.
  • Federally consolidated loans consolidated after 6/30/2022 can still be considered under loan cancellation.  The federal govenment has access as to when the loans were originally disbursed.
  • One-time student loan debt relief will not be subject to federal income taxes. State and local tax implications will vary.  The State of Indiana WILL tax forgiven student loan debt as income, also county taxes may apply.
  • Borrowers that owe less than $10K may have their loan balance forgiven, but will not receive the entire $10K.

Helpful Links 


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