On August 24, 2022, President Biden announced a three-part plan for federal student loan debt relief.
This page is designed to provide the Oxy community with information and updates on how the new plan will affect Oxy alumni, students and parents. Please check back on a regular basis, as we don't yet have complete information about all aspects of the plan.
What We Know
President Biden’s plan includes proposals for the following:
The Department of Education will provide up to $20,000 in federal student loan debt cancellation to Federal Pell Grant recipients and up to $10,000 in federal student loan debt cancellation to non-Federal Pell Grant recipients. Borrowers are eligible for relief if their individual income is less than $125,000 ($250,000 for married couples).
An application for this debt relief will be available in early October. Borrowers should apply by Nov. 15 to have their balance reduced or eliminated before the student loan payment pause ends Dec. 31. Only federal student loan debt is eligible. Private loans are not. You can check your student aid history, including loan balances and Pell Grant recipient status by logging in to your federal student aid account on studentaid.gov.
Those eligible for relief include current students and borrowers who have federally-held undergraduate, graduate, and Parent PLUS loans with an outstanding balance as of June 30, 2022. Borrowers who were dependent students in the 2021-22 year will be eligible for relief based on parental income, rather than their own income.
The current pause on federal student loan repayment will be extended until December 31, 2022. The extension is automatic; borrowers don't need to take any action. This is a one-time extension; borrowers should expect to resume payment of any uncancelled debt in January 2023.
New and Revised Repayment Plans
A new income-driven repayment plan has been proposed that will cap monthly payments on federal student loans for undergraduates to a lower percentage of a borrower’s discretionary income. The plan also calls for forgiving loan balances after 10 years instead of the current 20 years for borrowers with balances of $12,000 or less. The proposal will also cover any unpaid monthly interest in this plan so that a borrower’s loan balance will not increase when their monthly payment is determined to be less than the accruing interest.
Temporary adjustments to the current Public Service Loan Forgiveness program have been proposed to allow more payments to qualify for forgiveness. The deadline for applying for forgiveness is October 31. Find more information about this program.
Review the Federal Student Aid Office's FAQ page. There will be more details announced in the coming weeks. To be notified when the process has officially opened, sign up at the Department of Education subscription page.
Beware of Student Loan Forgiveness Scams
Reports of student loan forgiveness scams have already been reported. Generally, you can spot a scam if a company contacts you requesting a fee, promising instant debt relief, asking for your social security number, bank account details or account passwords, or pressuring you for an immediate answer. Trusted emails will come from firstname.lastname@example.org. More information about how to avoid federal student aid scams can be found here.