Federal Government Student Loan Forgiveness Portal Is Temporarily Closed. Here's what you need to know

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Updated: 2022-12-06

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Student Loan Forgiveness Progams

How to Get Out of Student Loan Default

IMPORTANT: The Federal Forgiveness portal is not taking new applications, pending appeal of a court ruling that declared the program unconstitutional (even though those challenging the program may lack the legal standing to bring the challenge).

President Biden has extended the loan forbearance period due until August 29, 2023?, 60 days after the end of the Supreme Court’s term, to handle this unforeseen problem.

Originally the forgiveness program was announced to coincide with the end of the pandemic suspension of student loan payments, with people given 60 days from (November and December) to apply for loan forgiveness before the first payments resumed after the end of extended Covid-19 Pandemic Forbearance.

Now that the forgiveness program is stalled in the courts, President Biden has announced that all loans payment will resume 60 days after the legal proceedings are finalized, or June 29, 2023, the end of the Supreme Court’s current term.

How the program was SUPPOSED to work (and still may, depending on court rulings)

Student Loan borrowers in your state may be able to take advantage of the many new forgiveness options under the new Student Loan Debt relief plan announced by President Biden on August 24, 2022.

Details of the application process were released on October 11, 2022.

Official Forgiveness “portal” opened on October 15, 2022

ALL APPLICATIONS MUST BE SUBMITTED BY DECEMBER 31, 2022 --

NOTE: AS OF NOVEMBER 22: The Program is Suspended Until the Courts Have Ruled on the Loan Forgiveness Program

No loans can be forgiven at this time. Those who have submitted applications may have heard that they meet the criteria, but actual loan forgiveness depends on how the courts rule.

Many borrowers (who received Pell Grants to attend college) will see $10,000 to $20,000 automatically eliminated from their student loan balance.

That means if you owed $6,500 on a federal student loan, you now owe nothing!

The new law has three major elements that are a true game-changer for student borrowers.

It extends forbearance (pause) (in which payments and interest are suspended) until December 31, 2022 (now August 30, 2023). Forbearance started with the CARES Act in March 2020. It pauses payments and interest on Federal Student Loans
it offers loan forgiveness of up to $20,000
It offered new income-based-repayment options which limit your payments to no more than 5% of your income for 20 years. If you make those payments, the loan balance is written off.

There are several good summaries of the law from sources like NPR and the National Consumer Law Center’s “Student Loan Borrower Assistance Center.”

The Student Loan Lawyer has a very clear video explaining the new law (also on Facebook Watch) by a lawyer who understands the nuances of the words used to describe these loans and how this affects your qualifications.

3 Key Points:

1. Your First Student Loan Bill will be January September 25 or 31st of, 2023

Student loan forbearance, which started under the CARES Act in March 2020, is being extended one last time until December 31, 2022 August 30, 2023. Bills will go out on September 1 for student loan borrowers, and the first bills will probably be due around September 25 or 31st.

2. The New “Income Based Repayment” (IBR) or “Income Derived Repayment” (IDR) now requires only 5% of income (not 10% anymore)

Before those first bills come due, you should learn about the new income-based repayment options that can limit your student loan payments to only 5% of your income for the rest of your life. As long as you make these payments for 20 years, the rest of your loan is forgiven, regardless of the remaining balance.

The new rules change the existing income-based rules. Current rules require a 10% of income payment on all student loans. That is cut in half by the new regulations.

It is unclear whether the court ruling affects the IBR program. It may not.

3. The new rules eliminate $10,000 to $20,000 in student loan debt (married couples can double).

For those with debts less than $10,000 to $20,000, this will completely eliminate their debt. (About 74 million borrowers meet this description
- If you got Pell grants, you get $20,000 in relief
  - most of these are poor, first-generation college students
  - .@POTUS' decision to cancel a big chunk of student debt is a big deal. This will provide relief to middle-class Americans who've struggled the most with student debt. pic.twitter.com/1QBgY9ZNLN
    — Elizabeth Warren (@SenWarren) August 25, 2022
For those with loans more like $80 to $100,000, this may wipe out the interest that you’ve accumulated over time.
For those with six-digit loan balances, you’ll still have a six-digit loan balance, but this will help.

by Albin Renauer

Albin Renauer has spent a career making consumer law information free and accessible to everyone. In 2006, Albin launched LegalConsumer.com and the free Bankruptcy Means Test Calculator. Millions of consumers have used these FREE tools and information to learn about their rights under bankruptcy law. Since 1989, Albin has also been a co-author of 22 editions of Nolo's bestselling guide How to File for Chapter 7 Bankruptcy, (Nolo, 22nd ed, 2021).

Jurisdictional relevance: The content of this article pertains to all US states and counties.

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Student Loan Forgiveness Progams

Did you work full time in a public service job for at least 10 years? Did you make payments on your direct student loan for that entire time? If so, you may be able to get ALL of your remaining student loan debt cancelled once you've made your 120th qualifying payment.
How to Get Out of Student Loan Default

What to do if you've defaulted on student loans, whether federal or private.

Subject	Federal Student Loans	Federal Parent Loans	Private Student Loans^*
When payments become due	Payments aren’t due until after you graduate, leave school, or change your enrollment status to less than half-time.	You (the parent) can choose to put off payments until the student you borrowed for graduates, leaves school, or changes enrollment status to less than half-time.	Many private student loans require payments while you are still in school, but some do allow you to defer (put off) payments while in school.
Interest rates	The interest rate is fixed and is often lower than private loans—and much lower than some credit card interest rates. View the current interest rates on federal student loans.	The interest rate is fixed and may be lower than private loans—and much lower than some credit card interest rates. View the current interest rates on federal student and parent loans.	Private student loans can have variable or fixed interest rates, which may be higher or lower than the rates on federal loans depending on your circumstances.
Subsidies	If you have financial need, you may qualify for a loan for which the government pays the interest while you’re in school on at least a half-time basis and during certain other periods. This type of loan is called a "subsidized loan."	These loans are not subsidized; therefore, you will be responsible for all the interest on your loans.	Private student loans are often not subsidized. In the case of an unsubsidized loan, you will be responsible for all the interest on your loan.
Credit check	You don’t need to get a credit check to qualify for federal student loans (except for PLUS loans). For PLUS loans, we will check your credit before determining whether you are eligible. Learn how someone with an adverse credit history may qualify for a PLUS loan.	We will check your credit before determining whether you are eligible. Learn how someone with an adverse credit history may qualify for a PLUS loan.	Private student loans often require an established credit record or a cosigner.
Tax benefits	Interest may be tax deductible.	Interest may be tax deductible.	Interest may be tax deductible.
Consolidation & refinancing	Loans can be consolidated into a Direct Consolidation Loan. Learn about your consolidation options.	Loans can be consolidated into a Direct Consolidation Loan. Learn about your consolidation options.	Private student loans cannot be consolidated into a Direct Consolidation Loan but may be refinanced.
Postponement options	If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.	If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.	You should check with your lender to find out about options for postponing or lowering your loan payments.
Repayment plans	There are several repayment plans, including an option to tie your monthly payment to your income.	There are several repayment plans, including an option to tie your monthly payment to your income.	You should check with your lender to find out about your repayment options.
Prepayment penalties	There is no prepayment penalty fee.	There is no prepayment penalty fee.	You need to make sure there are no prepayment penalty fees.
Loan forgiveness	You may be eligible to have some portion of your loans forgiven if you work in public service. Learn about our loan forgiveness programs.	You may be eligible to have some portion of your loans forgiven if you work in public service. Learn about our loan forgiveness programs.	Although many private lenders do not offer loan forgiveness programs, some student loans from state agencies can be forgiven in certain circumstances.
Where to get help	Contact your loan servicer first. If you have difficulty with your loan servicer, send us feedback.	Contact your loan servicer first. If you have difficulty with your loan servicer, send us feedback.	Contact your loan servicer first. If you have difficulty with your loan servicer, contact the Consumer Financial Protection Bureau for assistance