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

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  • Only loans from the US government 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 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 you 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 their taxes jointly

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

Student loan expert Sonia Lewis, who has worked with over 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 want to do,” she tells Insider, “is log on to studentaid.gov and click ‘view details.’ Your loan type will be just above the green circle.”

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

An example screenshot of the dashboard on 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 in student loan forgiveness.

studentaid.gov



Here is a list of all the different loan types and whether they are eligible for student loan forgiveness.

Which loans qualify for student loan forgiveness?

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

Student loan types that qualify for forgiveness

  • Undergraduate and graduate Direct loans
  • Parents PLUS loan
  • Direct PLUS loans given to graduate and professional students
  • Consolidation loan (with underlying loan disbursed on or before 30 June 2022)
  • FFEL loan held by the Ministry of Education
  • Perkins loans held by the Department of Education
  • Defaulted loans (including Department of Education-owned or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS and graduate PLUS loans, and Department of Education-owned Perkins loans)

Servicers that administer student loans held by the US government

  • FedLoan Servicing (PHEAA)
  • Great Lakes Education Loan Services, Inc.
  • Edfinancial
  • A model
  • Auxiliary benefit
  • Nelnet
  • OSLA servicing
  • GO OUT
  • Default resolution group

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

Which loans do not qualify for student loan forgiveness?

Privately owned FFEL loan

Some FFEL loans are federally backed loans issued by a private lender. Because they are owned by a private lender and not the US government, they are not eligible for student loan forgiveness. The Biden administration is working to forgive all privately owned 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 the Biden Student Loan Forgiveness Plan.

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

Perkins loan

Perkins loans are low-interest loans for undergraduate and graduate students who demonstrated exceptional financial need, and they were discontinued in 2017. Lewis says, “These loans would be paid back to the actual college and not to the government. So the school was able to issue the loan through money financed by the government.”

Because Perkins loans are paid back to schools and not the federal government, they are not eligible for Biden’s student loan forgiveness. You can consolidate your Perkins loans into a direct loan to receive full forgiveness, but this 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 at a public or nonprofit school (some part-time teaching work qualifies for forgiveness)
  • Nurse or medical technician
  • Qualified professional provider of early intervention for the disabled
  • Faculty member at a tribal college or university
  • Speech-language pathologist with a master’s degree working in a Title I-eligible elementary or high school
  • Librarian with a master’s degree working in a Title-I qualified school
  • Law enforcement or detective
  • Attorney employed by a federal public or local defense organization
  • Employed in a public or private nonprofit child or family service agency that provides services to high-risk children and their families from low-income communities
  • Associate in the education portion of a Head Start program
  • Employee in the educational portion of a pre-K or child care program that is licensed or regulated by a state
  • Military service in the United States Armed Forces in a hostile fire or imminent danger area
  • AmeriCorps VISTA or Peace Corps Voluntary Cancellation

Private student loans

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

This is how you know what types of loans you have

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

From there, check the “Loan breakdown” section for a list of your loans. Click on “View loan” and then “View loan information”. Review the names of your loans and look for “Direct” – these 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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