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Who qualifies for the latest student loan relief plan?

Student debt forgiveness helped Brendan Sullivan, who is disabled and works at Nellis Air Force Base, obtain new crutches and a wheelchair.
Who qualifies for the latest student loan relief plan?
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If you think you don’t qualify for student debt relief, there may be some hope. The new student debt relief plan announced by the Biden Administration makes money available to qualified individuals. 

The current student loan forgiveness plan is separate from the forgiveness plan that the Supreme Court shut down in June. It offers debt relief to make the system manageable for working families, and is known as theSAVE plan, for Saving for a Valuable Education.

Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans. 

A borrower’s monthly payment amount is based on their discretionary income. This means a single borrower who makes about $15 an hour will not have to make any monthly payments. The Department of Education estimates that more than 1 million additional low-income borrowers will qualify for $0 monthly payments.

Pell Grant recipients will qualify for up to $20,000 in debt cancellation, and some non-Pell Grant students may qualify for up to $10,000 in debt cancellation. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for married couples. No high-income individual or high-income household — in the top 5% of incomes — will benefit from this action. 

The latest plan aims to help lower and middle-income borrowers, said Jacque Discenza, founder and education consultant at Sarphatie Education. For people making under $32,000 a year, there will be zero repayment, she said. And for a family of four, it’s under $67,000 a year with a caveat. Both spouses may make under $67,000 a year and still qualify for loan relief, Discenza explained.  

The Biden-Harris administration also pledged to fix problems in the student loan system. The administration said it has already canceled more than $116 billion in student loan debt for 3.4 million Americans. The fixes include helping people who have been in repayment for over 20 years but never got the relief they deserved, relief for 662,000 public service workers, loan forgiveness for 491,000 borrowers who have a total and permanent disability and forgiveness for borrowers who may have been cheated by their schools.

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Brendan Sullivan recently received loan relief after being at a crossroads with his student loans for 15 years. He is disabled with cerebral palsy and works as a public service employee as an attorney at Nellis Air Force Base in Nevada. 

“Because I had the wrong payment plan I was told I didn’t qualify,” said Sullivan, 41. 

His issue was resolved as he completed forms to prove his public service and his disability status in 2022 and had switched to being on the income-based repayment plan. Sullivan graduated from University of Illinois in 2005 and Southern Illinois University School of Law in 2008.

 It took 10 months from the time he filed to receiving loan forgiveness this year. The savings of $450 a month has helped tremendously, said Sullivan, who is single.

“I can take the $450 a month, I can use it for my disability,” he said, noting he recently spent $1,300 for new crutches and purchased a new wheelchair.

“It helps me function and to be able to keep working,” Sullivan said.  


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