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by Rob Porter | October 04, 2022


It’s October, and you know what that means. Yes friends, the time has come for apple spice donuts, caramel apples, other apple and pumpkin spice-related snacks and beverages, jack-o-lanterns, haunted houses, Halloween candy, and student loan relief! You read that right, we’re kicking off this year’s season of fright festivities with something that’s actually not scary at all. Well, for the most part anyway-but more on that later.

President Biden announced his three-part plan back in August and for many borrowers who are suffering from crippling student loan debt, it was a step in the right direction in providing graduates with the opportunity to achieve financial independence as they make payments. The first part of the plan is to provide targeted debt relief to borrowers who make less than $125,000 a year. This part of the plan will provide those who qualify with up to $10,000 in debt cancellation from the Department of Education. Those with Pell Grants will receive up to $20,000.

A newly proposed income-driven repayment plan will protect low-income borrowers from making student loan payments, and will cap monthly payments for those paying undergraduate loans at 5 percent of their discretionary income. With this new repayment plan, the average annual student loan payment should be around $1,000 less for both current borrowers and future borrowers. This repayment plan will also provide specialized relief for those who worked in the non-profit sector, held a position in federal, state or local government, or who have served in the military.

The final aspect of the relief plan is to reduce the cost of college for future students, while making Pell Grants more easily attainable. Biden has also promised to work with community colleges in hopes of making community college education entirely free, and will be holding private universities accountable through an annual watch list program that will publish information on the worst offenders with regards to putting students into crippling debt. For more information about student loan debt and the relief plan, you can check out our previous coverage here.

So, now for the scary part. Just as soon as the application for student loan relief was released, the Biden Administration announced a sort of addendum to the plan that could affect more than 4 million borrowers. As of the recent announcement, borrowers with privately-held student loans are no longer eligible for one-time debt relief. In other words, borrowers who do not have student loans that are held by the Department of Education can no longer apply to have their loans consolidated into Direct Loans.

The next problem is for those who are in the Federal Family Education Loan (FEEL) program. If you managed to apply for one-time debt relief before this most recent announcement, you’re in the clear. If not, you are no longer eligible for relief. The FEEL loan program is quite old, and these types of borrowers represent less than 1 million of the 4 million borrowers who have privately-held loans. Nevertheless, this announcement came as a surprise and has left many borrowers with privately-held student loans feeling down and out-but don’t fret, for there is still light at the end of the tunnel.

The Department of Education has issued a statement with regards to the new changes to the student loan relief plan. Currently, the DOE is in talks with private lenders in order to devise “alternate pathways” for borrowers with student loans that are not held by the Department of Education, including borrowers in the FEEL program, and those with Perkins Loans. So, for now it seems like a waiting game, and if you’ve got a privately-held loan, you might yet get some form of relief.

Now that we’ve got the scary part out of the way, we can talk about the exciting stuff. That’s right, the application for student loan relief is now live! Just click this handy link, follow the instructions, and soon you’ll be well on your way to having some sweet, extra cash to spend on all your cool hobbies. Or you could use it to pay bills or save, it’s your journey.

The student loan payment pause was previously extended through December 31, 2022, along with an announcement that it will be the final extension. As of the present, there is no new information with regards to further student loan payment pausing, so now is the time to get yourself all set up. As always, we will keep you updated about the DOE’s discussions with private lenders, and all other relevant information as it becomes available.