Biden Forgives More Student Loans: What Borrowers Need to Know

The Biden administration has announced another round of student loan forgiveness, providing relief to certain borrowers. This effort follows previous attempts at widespread cancellation that faced legal challenges. Millions could benefit, but eligibility depends on specific criteria.

Eligible Loan Categories

This round of student loan forgiveness applies to specific federal loans. Borrowers with Direct Loans—including Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation Loans—are among the primary beneficiaries. These loans, issued by the U.S. Department of Education, are the most common form of federal student debt.

Federal Family Education Loan (FFEL) Program loans may qualify if they are federally held. Many FFEL loans were originally issued by private lenders and later backed by the government, but only those transferred to the Department of Education are eligible. Borrowers with commercially held FFEL loans must consolidate into a Direct Loan to receive relief.

Perkins Loans, issued by schools and backed by the federal government, may also be eligible if consolidated into a Direct Loan. Perkins Loans that remain with the original lending institution do not qualify. Parent PLUS Loans, which allow parents to borrow on behalf of their children, are eligible under certain forgiveness programs but often have stricter requirements.

Non-Eligible Debts

Private student loans are not covered under the Biden administration’s forgiveness initiatives. These loans, issued by banks, credit unions, and other private lenders, operate under different terms than federal loans and do not fall under Department of Education policies. Borrowers with private student debt must rely on lender-specific relief programs or refinancing options. Unlike federal loans, private lenders do not offer income-driven repayment plans or federal deferment and forbearance protections.

Institutional loans, provided directly by colleges and universities, are also ineligible. These loans vary in terms and conditions, with repayment policies set by individual schools. Since they are not backed by federal funds, they do not qualify for forgiveness programs. Borrowers with institutional loans must negotiate directly with their school for repayment options.

State-based loan programs, such as those offered by state agencies, are also excluded. These loans are not federally administered and do not fall under federal forgiveness measures. Some states offer their own repayment assistance or forgiveness programs, particularly for professionals in fields like healthcare and education, but these operate independently from federal initiatives.

Income Threshold Criteria

Eligibility is based on adjusted gross income (AGI) as reported on federal tax returns. Individual borrowers must earn less than $125,000, while married couples filing jointly or heads of household must earn under $250,000. These limits align with previous federal forgiveness efforts, focusing relief on middle- and lower-income households.

Income verification relies on tax filings from either 2020 or 2021, whichever year provides the lower AGI. This accounts for financial disruptions from the COVID-19 pandemic. Borrowers who had a temporary drop in earnings during this period may qualify even if their current income exceeds the threshold. The IRS shares relevant tax data with the Department of Education to streamline verification, though those who did not file taxes in those years may need to submit alternative documentation, such as pay stubs or employer statements.

Borrowers are not reassessed based on recent earnings. If someone earned $120,000 in 2021 but now makes $140,000 in 2024, they remain eligible. However, those who exceeded the income limits in both tax years cannot qualify, regardless of current financial hardships.

Repeat Discharges

Borrowers who previously had loans forgiven under targeted relief programs may still qualify for additional discharges if they meet the new criteria. Those who had only a portion of their debt canceled in earlier rounds may receive more relief if they still carry an outstanding balance. This is particularly relevant for borrowers who benefited from Public Service Loan Forgiveness (PSLF) adjustments or income-driven repayment (IDR) recalculations.

The Department of Education reassesses borrower accounts under evolving policies, meaning some who were previously denied forgiveness may now be eligible. IDR borrowers who had payments miscounted in past audits might receive additional credit toward cancellation. Those who consolidated loans after partial forgiveness could see their remaining balance discharged if it meets the latest program requirements. Parent PLUS Loan borrowers, who have historically faced stricter discharge limitations, may also have new opportunities depending on how their loans were structured and repaid.

Missing Deadlines

Borrowers must meet application deadlines to receive loan forgiveness. Deadlines vary by program, and missing them can mean waiting for a future round of relief—if one is offered. Some forgiveness initiatives are one-time opportunities, making it important for borrowers to stay informed about cutoff dates. Those who need to gather documentation should start early to avoid last-minute issues.

For borrowers who miss a deadline due to extenuating circumstances, such as medical emergencies or natural disasters, options for reconsideration may be limited. While the Department of Education has extended deadlines in past relief efforts, these extensions are not guaranteed. Borrowers who believe they qualify but missed the application window should contact their loan servicer immediately to explore alternatives, such as deferment or income-driven repayment adjustments.

Pending Repayment Status

Borrowers currently in repayment remain eligible for forgiveness if they meet the program’s criteria, regardless of whether they are actively making payments, in deferment, or in forbearance. However, those in default may need to take additional steps, such as enrolling in the Fresh Start initiative, which helps rehabilitate defaulted federal loans and restore eligibility for federal benefits, including forgiveness.

Borrowers who made payments after the federal student loan pause ended may be eligible for refunds if their loans are later forgiven. Those enrolled in income-driven repayment plans should verify that their payment history is accurately recorded, as past errors have led to some borrowers missing out on forgiveness. Ensuring all records are up to date can prevent unnecessary delays in processing relief.