Biden cancels $10,000 in student loan debt — how to know if yours is canceled

President Biden, joined by Education Secretary Miguel Cardona, delivers remarks at the White House
U.S. President Joe Biden, joined by Education Secretary Miguel Cardona, speaks about student loan forgiveness in the Roosevelt Room of the White House (Image credit: Alex Wong/ Getty)

The Biden administration announced its plan to forgive $10,000 in student loans for eligible borrowers.

In a tweet from the @POTUS Twitter account, President Joe Biden describes the move as keeping his promise to "give working and middle-class families breathing room as they prepare to resume federal student loan payments in January 2023."

(Image credit: Future)

The long-awaited student loan forgiveness announcement comes on the heels of several student loan payment pauses that began over two years ago with provisions from the CARES ACT, passed in the wake of the coronavirus pandemic.

During the payment pause, student loan borrowers with federal loans were no longer required to make their loan payments and had a 0% interest rate while collections activity stopped for defaulted loans.

So far, this payment pause is still in effect until December 31, 2022, unless the administration extends it again.

Here's how to determine if your student loan debt will be canceled.

Who’s eligible for student loan forgiveness?

Borrowers that earn less than $125,000 annually (or less than $250,000 for married couples filing jointly) are eligible for student loan forgiveness.

Those who qualify will receive forgiveness of up to $10,000. But, if you're a Pell Grant recipient, you could have up to $20,000 forgiven.

According to White House figures, the cumulative federal student loan debt of $1.6 trillion is held by over 45 million borrowers. Nevertheless, not all of these borrowers will qualify for the loan forgiveness plan announced by the President earlier today.

However, the administration does state that nearly 90% of this debt cancellation will go to borrowers earning less than $75,000. 

Here's who qualifies for student loan forgiveness:

Income-eligible borrowers

Although further details are forthcoming, we know so far that you’ve got to meet income eligibility requirements to qualify, or else your student loans will not be forgiven.

If you earn more than $125,000 as an individual taxpayer or $250,000 as a married couple filing jointly, you’ll still be on the hook for your student loans.

Pending further clarification, we think the income figure used to verify your eligibility may come from your modified adjusted gross income (AGI) taken from either your 2020, 2021 or possibly your 2022 income tax return.

This method was used to determine eligibility for the advance Child Tax Credit Payments in 2021 and is also used for other federal income-eligible programs like USDA loans.

Federal student loan borrowers

This type of debt forgiveness only covers federal student loans, so if you've student loans from a private lender, like a bank or similar financial institution, they will not be eligible for this forgiveness program.

Current student borrowers

If you're a borrower currently in school, your loan forgiveness eligibility will be based on your parent's income. So far, there’s no indication that parents who took out loans for their children will have their loan balances forgiven.

What else should I know about student loan forgiveness?

Although this particular forgiveness program seems to cover a specific subset of student loan borrowers, you should know that there are other loan forgiveness measures that you could be eligible for.

The White House also indicated that it is exploring additional loan forgiveness programs for varying circumstances, such as:

  • Reducing the amount that borrowers have to pay each month from 10% to 5% of discretionary income
  • Increasing the amount of income is considered non-discretionary so that no borrower earning under 225% of the federal poverty level would have to make a monthly payment
  • Forgiving loan balances after 10 years of payments instead of 20. This would apply to borrowers with original loan balances of $12,000 or less
  • Covering borrowers’ unpaid monthly interest to prevent loan balances from growing as long as borrowers make their monthly payments

Other student loan forgiveness initiatives have also included:

  • The recent limited Public Service Loan Forgiveness (PSLF) waiver which relaxes eligibility requirements for borrowers until October 31, 2022
  • Borrower Defense Loan Discharge for those who believe their school misled them or engaged in other misconduct
  • Total and Permanent Disability Discharge for borrowers that are totally and permanently disabled
  • Closed School Discharge for borrowers whose schools closed while they were enrolled

Over the years, the U.S. Department of Education and the White House have continued to modify repayment requirements and add student loan forgiveness initiatives to their agendas.

As a result, it's possible that more relief, in some form or another, will make it to Americans struggling with student loan debt.

Today's announcement proves that these relief options could continue to evolve as Americans' financial circumstances also change.

Aja McClanahan
Personal finance writer

Aja McClanahan is a writer and licensed real estate agent that covers personal finance and a number of related topics. Her work and personal story of paying down over $120,000 in debt have been featured in publications around the web, including sites like,, Business Insider, Inc., Kiplinger's, Experian and many others.