What You Need to Know About Student Debt Cancellation

August 26, 2022
Wil Del Pilar

Individuals who earn less than $125,000/year or couples earning less than $250,000/year are eligible for federal student debt cancellation of $10,000.

If you were a Pell Grant recipient in college and meet the income requirements, you are eligible for up to $20,000 in student debt cancellation.

This determination is based on adjusted gross income.

Only student debt held by the Department of Education is eligible for cancellation.

Any student debt that is cancelled will not be taxable.

Cancellation may be automatic for borrowers for whom the Department already has income information.

For other borrowers, the Department of Education will post a cancelation application by December 31, 2022. You can sign up for updates for when the application is available on ED’s website.

Cancellation only applies to existing loans. New loans are not eligible.

The pause on student loan payments has been extended until December 31, 2022. The administration says this will be the final pause on repayment, and that remaining student loan payments will resume in January 2023.