Student Loan Forgiveness Tool

Overview

The Biden administration announced its student loan plans recently. Here's what we know so far and how it impacts your decision to refinance your loans.

First, you may be eligible for $10-20K in loan cancellation. Here are the highlights:

  • If you ever received a Pell Grant as an undergraduate student, you get up to $20K of cancellation. For everyone else, you can get up to $10K.
  • Applies to Federal student loans that originated before July 1, 2022 (might not apply to loans made before 2011)
  • You are eligible if you make less than $125K by yourself or $250K as a married couple

Second, the Federal student loan payment and interest pause is over on Jan 1, 2023. After that, interest should start accruing again and payments are set to resume.

Am I eligible for loan forgiveness?

Disclaimer: This Student Loan Forgiveness tool was created by Juno and is not endorsed or affiliated with the U.S. Department of Education. Please consult a licensed financial professional before making any financial decisions relating to student loan forgiveness.

If you still have student debt left after cancellation takes effect, start looking at your refinancing options before payments resume. Interest rates have been steadily rising over the last few months, but are still historically low. Juno members get access to exclusive refinancing discounts and cash back offers. Just remember not to refinance anything that qualifies for forgiveness. We work hard to find you low rates, but can’t beat cancellation.

More Details on Loan Cancellation:

Which Loans are Included?
Most Federal Student Loans that originated before July 1, 2022. If you have loans from pre-2011, they may not be included.

What’s Forgiven?
For most eligible borrowers, up to $10,000 will be forgiven. If you ever received a Pell Grant as an undergrad student, you qualify for up to $20,000. The total amount you receive depends on the amount of your outstanding debt. For example, if you’re a Pell Grant Recipient with $13,500 in student loan debt, your relief will be capped at your total outstanding debt ($13,500).

Is there an income cutoff?
You must have an annual income below $125,000 for single filers, or $250,000 for joint or head of household filers to qualify. This will likely be based on Adjusted Gross Income (AGI) from either your 2020 of 2021 tax returns. We don’t have all the details yet, but it appears to be a hard cutoff, meaning if you made $126K, you would not qualify for loan forgiveness.

How Will it Work?
Details on this are still forthcoming. Some borrowers, who previously used an income-based repayment plan for federal student loans, will get forgiveness automatically. For everyone else, an application will be released in the coming weeks.

When Do Payments Restart?
If you have existing Federal student loans, your payments and interest accrual have been on pause since early 2020. Repayments should begin again on January 1, 2023.

For more information, be sure to check out the Federal Student Aid site here––they’ve already added a detailed breakdown, FAQs, and will likely link to any applications to claim forgiveness on this page. If you have any questions for us about this, we’re happy to connect with you.

Federal Loan Forgiveness FAQs:

Q: Can my loans still be forgiven if I already refinanced them?

A:
Once you refinance a federal student loan with a private lender, you lose all of the federal protections. Refinanced loans do not qualify for cancellation. 

Similarly, if you’ve only consolidated your federal student loans, and they’re still held with a federal loan servicer, they’re eligible for forgiveness. 

Q: Who is my loan servicer?

A:
If you’re unsure who your federal student loan servicer is, please call Federal Student Aid at 1-800-433-3243, or sign in to your Federal Student Aid Account Dashboard

Q: So this indicates we should go with a government loan in anticipation that forgiveness will happen again next year?

A:
Anticipation is a slippery slope. Right now, the administration is clearly communicating this as a “one-time student loan cancellation…based on income.” Given that, we caution anyone who may be planning for/making decisions around anticipated continued loan forgiveness.

Q: What do I need to do to apply for forgiveness?

A:
Right now, nothing. For some borrowers, forgiveness will happen automatically, based on your most recent income information. For most borrowers, whose income information is not updated, an application to claim your forgiveness will be made available here in early October; borrowers are “advised to apply before November 15th in order to receive relief before the payment pause expires on December 31, 2022). ––but do note that it will likely be weeks or months before you see status changes in your account dashboards. Loan Servicers and the U.S. Department of Education are moving as quickly as possible, but do not have any additional timing information at this time.  

Q: How do I know if I received a Pell Grant?

A:
 To check if you received a Pell Grant, log in to the FAFSA home page and click the "My FAFSA" tab.

Q: Do we know more about the AGI calculation for 2020 vs 2021? For example, if my income was below said limit for 2020 but above the limit for 2021?

A:
Although the administration hasn’t clarified this outright, most reports are sharing that if either your 2020 or 2021 tax returns were at/under the maximum income levels for forgiveness, you should expect to see the cancellation. 

Q: How do I know if I have federal or private loans?

A:
If you’ve forgotten what type of loans you have, we have a few tips that may help you locate your loans/type:
  • The best way to know for sure is to review your most recent tuition statement and/or bill to see the name of the servicer and/or loan type. 
  • Searching your email for the keywords “Loan Agreement.” 
  • Another good rule of thumb––looking at the names! If your loans have any of the following words attached to them, they’re likely federal: subsidized, unsubsidized, PLUS.