There has been quite a bit of excitement recently over President Biden's student loan plan for forgiveness. Unfortunately, there has also been a lot of misunderstanding and misinformation surrounding it. You may be asking yourself, can this plan help me? Can I get my student loans forgiven? The answer, truthfilly is . . .

. . . it depends! 

Only Federal Loans

If you have private loans or CLASS loans through New Jersey HESAA, then you are out of luck. His plan only helps with federal loans, and even then only those held by the Department of Education. This means that if you have a Direct Loan or a defaulted FFEL loan, then this applies. If you have FFEL loans that are not defaulted, this forgiveness does not apply. Check out your loan information at to be sure.

Not Everything is Forgiven

If you have Direct Loans or defaulted FFEL loans, you need to bear in mind that they will not be wiped out entirely. There are certain maximum amounts, and how much you get depends on your income and whether you got a Pell Grant when you were in school. Individual borrowers who make less than $125,000 yearly and married couples or heads of households who make less than $250,000 yearly (and did not get a Pell Grant) will have up to $10,000 of their federal student loan debt forgiven (it may be less; we don't know yet).

Did you get a Pell grant? Then if you make less than $125,000 yearly (married couples or heads of households who make less than $250,000 yearly), then you will have up to $20,000 of your student loan debt forgiven.

Remember, it isn't $10- or $20,000 in forgiveness; it's up to those amounts, so it could well be much less!

Getting Forgiveness

If you are one of 8 million borrowers whose income information is already known to the Department of Education, you may get it automatically. If not, the Biden administration will be sending you an application to enable you to provide income information to see if you qualify. But don't hold your breath; it may not be out for a couple of months.

What If You Don't Qualify?

Even though the repayment moratorium on federal Direct Loans has been extended to the end of the year, if you have FFEL loans that are current, you still have to pay (they just can't default you), so getting into a more affordable repayment plan is something you should do ASAP.

You might also consider consolidating your FFEL loans into a Direct one in order to get the benefits of these new initiatives. If you have decided that you need to do something about your loans and you are ready to take action, just click here to provide your federal loan information for a free, no obligation, initial review!

If you are in default of your federal loans or New Jersey CLASS loans, realize that you need to get out of default and into an affordable repayment plan, and are ready to take action, just click this link to schedule an initial telephone call to discuss your situation.

If you would also like more information about student loans, you can dowload my free book, I Graduated; Now What? A Guide to Dealing with Your Student Loans.

Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.