Do You Qualify for Student Loan Forgiveness?

Find Out if Your Are Eligible to Take Advantage of the New Program

After months of speculation, President Biden announced a new federal student loan forgiveness program on August 24, 2022.The plan will cancel a portion of student debt for borrowers who qualify and extend the national student loan payment pause through the end of 2022. The exact details of the plan are still unfolding, and there is talk of potential legal challenges, but there is enough information available to start planning ahead.

Up to 43 million borrowers may be eligible for some type of student loan relief, and it could make a substantial impact on their long-term finances. If that sounds like you, here is what you can expect from the new student loan forgiveness plan and what to do if you qualify for relief.

How Much Debt Is Forgiven?

The plan will forgive up to $10,000 for borrowers who didn’t receive a Pell Grant and up to $20,000 for borrowers who did. To confirm whether you’ve received a Pell Grant as part of your financial aid package, check your account on

The forgiveness is also capped at the total amount of outstanding debt, meaning you will not receive a refund if you qualify for $10,000 of forgiveness but only have $9,000 of debt. Those who have already paid off their debt will not qualify for retroactive student loan forgiveness.

Who Qualifies for Relief?

Single borrowers who make less than $125,000 per year, or married couples who make less than $250,000 per year will qualify for the relief. This amount is based on your adjusted gross income from 2020 and 2021.

Even if you qualify based on your income, you will have to make sure your loan type qualifies. First, only those loans taken out prior to June 30, 2022, will be included in the relief. Second, only those loans that fall under the William D. Ford Federal Direct Loan Program will qualify for forgiveness. Those include:

  • Direct Stafford Loans (both subsidized and unsubsidized)
  • Parent PLUS Loans
  • Graduate Loans

The Department of Education is also considering forgiving some private student loans, but nothing has been confirmed yet.[1]

How to Apply for Relief?

Borrowers will need to apply for relief if the Education Department does not already have their income information. Initial reports state that the application for forgiveness should be launched in October 2022, 2022 and borrowers will have until December 31, 2023, to apply.[2] To receive updates about the process, visit the Education Department’s website to sign-up for emails.

If you were enrolled in an income-driven repayment plan, your earnings information may already be in the system, and you may qualify for automatic cancellation.

Once your earnings information has been received, the Department of Education estimates that it could take up to 8 weeks to process and officially discharge the debt.[3]

Your Forgiveness May be Taxed by Your State

The Tax Foundation estimates there are seven states that could tax student loan forgiveness:

  • Arkansas
  • California
  • Indiana
  • Minnesota
  • Mississippi
  • North Carolina
  • Wisconsin

Keep in mind that the details are still evolving and it’s important to double-check this information with a tax professional in your state.

What Does Student Loan Forgiveness Mean for You?

No matter what your student loan situation looks like, we believe it’s important to understand the implications of the new forgiveness program before making any long-term decisions. Whether you are still paying off your debt, or planning for future college education costs, we are here to help. To learn more about how student loan forgiveness may impact your long-term financial goals, reach out to us at or click here to schedule a complimentary meeting.

Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of ACP as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a tax strategy, investment strategy, and financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Past performance does not guarantee future results. All investment strategies have the potential for profit or loss, and different investments and types of investments involve varying degrees of risk. There can be no assurance that the future performance of any specific investment or investment strategy, including those undertaken or recommended by ACP, will be profitable or equal any historical performance level. Additional information about ACP, including its Form ADV Part 2A describing its services, fees, and applicable conflicts of interest and its Form CRS is available upon request and at For current ACP clients, please advise us promptly in writing, if there are ever any changes in your financial situation or investment objectives, if you wish to impose any reasonable restrictions to our management of your account, or if you have not been receiving at least quarterly account statements from your account custodian.  

[1] All we know (so far) about Biden’s student loan forgiveness plan (

[2] Student loan forgiveness: Key dates and details so far – ABC News (

[3]  All we know (so far) about Biden’s student loan forgiveness plan (

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