Student Loans

The Biden administration has announced targeted student debt cancellation of up to $20,000 for eligible federal student borrowers.  In addition, the administration has extended student loan forbearance (a pause on the requirement to make payments on your federal student loans) through December 31, 2022 for all borrowers.  Federal student loan borrowers do not have to make payments until January 1, 2023; no interest will accrue, and this time will count toward Public Service Loan Forgiveness.

The Biden Administration has announced targeted cancellation of student debt for eligible borrowers.  Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation. Borrowers who met those income standards but did not receive a Pell Grant will be eligible for up to $10,000 in relief.  Further instructions on how to claim this relief and an application form will be available no later than December 31, 2022.

Yes, and now is the time to act – December will be here before you know it! This year has been financially tough on many people, but the good news is that options exist to make your student loan payments more affordable. Income-driven repayment plans are based on your income and your family size. If you are not making much money – and especially if you have lost your job or experienced a decrease in income during the pandemic – you can even lower your payments to ZERO.

Find out more and enroll in an income-driven repayment plan here

Get help managing your loans during this crisis from the Student Borrower Protection Center

Regardless of your situation, now is the right time to review your finances and reevaluate your payment plan – do this as soon as you can. Log back into your accounts, look at your monthly bill, and see if income-driven repayment is right for you.

The PSLF Program helps student loan borrowers working in nonprofit or government jobs by forgiving the remaining balance on your loans after you have made 10 years of qualifying payments (120 total monthly payments). Check out our new Public Service Loan Forgiveness resources here.

In order to qualify for PSLF, there are normally several requirements that you must meet:

  • Be employed full-time by a nonprofit or federal/state/local/tribal government during the time you make each qualifying monthly payment
  • Have Direct Loans (or consolidate other federal loans into a Direct Loan)
  • Repay your loans under an income-driven repayment plan
  • Make 120 qualifying payments

You can log into the Department of Education ( using your Federal Student Aid (FSA) ID. This is a username and password that is unique to each borrower. Not sure if you have an FSA ID? If you haven’t logged into the Department of Education’s website since May 2015, you probably don’t have an FSA ID. But don’t worry – you can easily create one. And if you forgot your username or password, don’t worry – there are options to recover your account information – on most log-in pages, look for links that say something like “Forgot My Username” or “Forgot My Password”.

Unfortunately, private student loans don’t qualify for the Department of Education’s forbearance program. However, many private lenders are offering disaster or emergency forbearance. Typically, that means a short-term pause on payments that won’t count toward any existing forbearance limits. Interest will still accrue during all private loan forbearance periods. If you’re having trouble making payments, don’t wait – reach out to your lender today. Here is a list of relief available from many private lenders.

Payments are automatically suspended for all borrowers, including those who were more than 31 days delinquent prior to March 13, 2020, or became more than 31 days delinquent soon thereafter. That means the loans are in forbearance and won’t default. Default on federal loans happens when a payment is 270 days past due, sending your loan to collections and exposing you to damaged credit, garnished wages and seized tax refunds.

For those with federal student loans already in default, all collection activities are suspended through August 31, 2022. You can get a refund for any forced student loan payments made since March 13, 2020 – if you believe you have had wages wrongly garnished or other attempts made to collect on student debt since March, contact Bay Area Legal Aid. If your tax refund was seized before March 13, 2020, it will not be returned.

For borrowers who were already in a loan rehabilitation agreement (in order to get out of default), each month of the forbearance period (through April 2022) will count toward the nine months needed for rehabilitation. Are you worried you won’t be able to afford the monthly payment proposed in the loan rehabilitation agreement after the payment suspension ends? Request an alternative monthly payment by filling out the Loan Rehabilitation Income and Expense form. This request may result in a lower monthly payment.

Talking to a financial coach is a great place to start. Our Smart Money Coaching program provides free, confidential, one-on-one financial guidance – including help with student loan repayment. The program is available to anyone living, working or receiving services in San Francisco, regardless of citizenship status. Our coaches are fluent in Spanish, Cantonese and Mandarin, with additional translation services as requested. 

For more assistance with student loan debt problems, including default, income-driven repayment, disability discharge and other issues, you can also get help from Free Consumer Rights Legal Clinics offered by Bay Area Legal Aid, or call them at 800-551-5554.

Millions of Americans are struggling to repay student loan debt. The National Consumer Law Center’s Student Loan Borrower Assistance Project is a resource for borrowers, their families, and advocates representing student loan borrowers.

Smart Money Coaching has helped thousands of people to address their unique financial challenges and goals, including reducing debt, establishing and improving their credit score, opening a low-fee bank account, and increasing their savings.

Our coaches come from our communities and have similar lived experiences as the people they serve. They trust that their clients are the best judges of their own financial situations and needs. Coaches won’t tell you how to spend your money, and instead will empower you to make informed decisions. Coaches are trained by experts, make referrals to trusted community partners, and can escalate issues to City leadership if needed.

Read more about how Smart Money Coaching creates meaningful and life-changing financial outcomes for our community in a recent report highlighting the five most important lessons we’ve learned since the program launched.

The Department of Education recently announced that federal student loan borrowers who qualify for total and permanent disability will have their loans forgiven automatically. This means as much as $5.8 billion in relief for 323,000 borrowers!

The changes announced by the Department of Education simplify the process and provide for automatic forgiveness of student loans for borrowers who are receiving disability benefits through the Social Security Administration. The Department of Education will conduct a data match of those receiving Social Security disability payments to identify the eligible individuals with outstanding federal student loans. The next data match will occur in September with individuals receiving discharges within the following weeks. The Department of Education estimates that all those eligible for student loan forgiveness will receive the discharge before the end of 2021.

While it remains to be seen whether future recipients of Social Security disability will receive automatic student loan forgiveness, disabled borrowers who are not yet receiving social security disability payments may apply for those benefits with the possibility of also receiving federal student loan forgiveness. However, borrowers should be aware of unfortunately low success rates and stringent requirements that, in addition to the lengthy waiting period, may prevent many from ultimately receiving automatic student loan forgiveness.

Learn more about these changes to disability loan discharge here.