August 26, 2022

Details emerging on student loan forgiveness plans

Source:  NYSUT and Cambridge Credit Counseling
student loan relief

On August 24, the White House unveiled its plan to forgive significant portions of federal student loans for millions of Americans. At the same time, the pause on direct student loan payments was extended to December 31, reportedly the last such extension that will be granted.

Please note that the planned balance reductions and the extended payment moratorium are separate from the Public Service Loan Forgiveness waiver period that was announced last October 6, and that is still set to expire on October 31, 2022.

While precise details of when and how the lump-sum forgiveness plan will take effect, there are several elements of the plan worth noting:

  • There are income limits that will govern who receives balance reductions. Individuals who earn $125k or less per year will see their federal student loan balances reduced by up to $10k. (People won’t receive checks in the mail. Their loan balance will just be reduced.) Married couples earning less than $250K will also be eligible for $10k in relief. Using those same income guidelines, the government will forgive up to $20k for borrowers who had received Pell Grants.
  • Parent PLUS loan borrowers and current college students will also be eligible for relief using the same $125k/$225k income guidelines. Dependent college students will use their parents’ income. Loans taken out after June 30, 2022, are not eligible for a reduction.
  • Most people will need to complete a simple application form to receive forgiveness, but roughly 8 million current loan holders whose income data is already on file with the US Department of Education won’t need to apply. The application form and process are still in development but are promised to be ready by the time loan payments resume in January 2023.
  • The administration is also proposing significant changes to income-driven repayment, which calculate monthly payments at 10% to as much as 20% of discretionary income. The proposal would limit monthly payments to 5% of discretionary income, cutting most monthly payments in half. These changes will need to be posted in the Federal Register and be open to public comment for 30 days. The changes could be in place when payments resume.

For more information, read the White House fact sheet on all proposed changes and be notified when additional information becomes available.

How do these changes impact NYSUT members who want to take advantage of the PSLF waiver opportunity but who have federal loan balances that would be eliminated by the proposed lump-sum forgiveness?

It’s your choice.

If you’re anxious about waiting until the application process rolls out, you could still complete the required steps to secure full balance forgiveness before the waiver expires on Halloween.

If the Administration’s relief plan won’t completely eliminate your debt, then you could follow the appropriate steps to qualify under the waiver, and then apply for the additional relief in January.

NYSUT offers more information and support

Confused? We're here to help!

Your NYSUT Member Benefits package includes free student loan webinars and one-on-one counseling with Cambridge Credit Counseling.

The next round of webinars, featuring plenty of live Q and A, are scheduled for September and October. If you haven’t yet discovered how the waiver could eliminate your loan balances or get you back on track for forgiveness, you need to attend because the waiver period expires on 10/31/22. This includes those of you who won’t have made 120 payments by that date.

  • Thursday, Sept. 15 @ 6 p.m.
  • Thursday, Sept. 22 @ 6 p.m.
  • Wednesday, Sept. 28 @ 4:30 p.m.
  • Thursday, Oct. 6 @ 6 p.m.
  • Thursday, Oct. 13 @ 6 p.m.

Register for a webinar today!

You can also contact Cambridge’s Todd Friedhaber ( or Martin Lynch ( to set up an appointment to discuss your options.