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- Only loans held by 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 loan 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 have to meet the following income requirements:
- Annual income of $125,000 or less for individuals
- Annual income of $250,000 or less for married couples who file their taxes jointly
However, some people might miss out on student-loan forgiveness simply because they have the wrong loan type.
Student loan expert Sonia Lewis, who has worked with over 20,000 clients to help them navigate their student loans via the Student Loan Doctor LLC, says most people don’t know their loan type in the first place. “The first thing you’ll want to do,” she tells Insider, “is log onto studentaid.gov and click ‘view details.’ Your loan type will be right above the green circle.”
If you can’t remember whether or not your received a Pell Grant, Lewis says that 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’re getting $20,000.”
Here’s a list of all the different loan types, and whether or not they qualify 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
- Parent PLUS loans
- Direct PLUS loans given to graduate and professional students
- Consolidation loans (with underlying loans disbursed on or before June 30, 2022)
- FFEL loans held by the Department of Education
- Perkins loans held by the Department of Education
- Defaulted loans (including Department of Education-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, parent PLUS, and graduate PLUS loans, and Perkins loans held by the Department of Education)
Servicers that manage student loans held by the US government
- FedLoan Servicing (PHEAA)
- Great Lakes Education Loan Services, Inc.
- OSLA Servicing
- Default Resolution Group
If your loans are managed by servicers not listed above, they are privately-held.
Which loans do not qualify for student-loan forgiveness?
Privately-held FFEL loans
Some FFEL loans are federally-backed loans issued by a private lender. Because they are held by a private lender and not the US government, they are not eligible for student-loan forgiveness. The Biden administration is working on granting forgiveness for all privately-held FFEL loans, but there’s no timeline yet.
If you have privately-held FFEL loans, you must consolidate your FFEL loans into a Direct loan to qualify for Biden’s student-loan forgiveness plan.
However, other FFEL loans are held by the US government, and those are eligible for $10,000 forgiveness, $20,000 if you received a Pell Grant. If you have FFEL loans and they are currently on pause because of the pandemic, they qualify for forgiveness.
Perkins loans are low-interest loans for undergraduate and graduate students who exhibited exceptional financial need, and they were discontinued in 2017. Lewis says, “These loans would be paid back to the actual college, and not the government. So the school was able to issue the loan through money funded 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 may consolidate your Perkins loans into a Direct loan to receive full forgiveness, but that may not be the best plan for you because Perkins loans are forgiven in full after five years of full-time work in the following professions:
- 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 services for the disabled
- Faculty member at a tribal college or university
- Speech pathologist with a master’s degree working in a Title I-eligible elementary or secondary school
- Librarian with a master’s degree working in a Title-I eligible school
- Law enforcement or corrections officer
- Attorney employed in a federal public or community defender organization
- Employee of a public or private nonprofit child- or family-services agency providing services to high-risk children and their families from low-income communities
- Staff member in the education component of a Head Start program
- Staff member in the education component of a pre-K or childcare program that is licensed or regulated by a state
- Military service in the US armed forces in a hostile fire or imminent danger pay area
- AmeriCorps VISTA or Peace Corps volunteer cancellation
Private student loans
Private loans held by 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.
How to know what kinds of loans you have
To find out what kind of loans you have, login to studentaid.gov and click on “My Aid” in the dropdown menu.
From there, check the “Loan Breakdown” section for a list of your loans. Click on “View Loans,” then “View Loan Details.” Review the names of your loans and look for “Direct” — those loans are eligible for forgiveness.
If you have FFEL or Perkins loans with “Dept. of Ed” or “Default Management Collection System” as the name of the servicer, your loans are owned by the federal government and are eligible for forgiveness.