The Student Loan Relief program set up to provide relief from the strains associated with the COVID-19 pandemic will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers eligible for this relief are those individuals whose income is less than $125,000 ($250,000 for married couples). The income cap is based on adjusted gross income, either from 2020 or 2021.
According to the Fact Sheet released by the White House on August 24th of 2022, any relief provided from this Student Loan Relief program will not be treated as taxable income for federal income tax purposes. The Fact Sheet also stated that “the pause on federal student loan repayment will be extended one final time through December 31, 2022. Borrowers should expect to resume payment in January 2023”.
At this time, the White House has not released clarification as to which student loans will automatically receive relief and which student loans will require an application to be submitted to receive relief.
To check to see if you have received a Pell Grant, visit the Federal Student Aid Site and navigate to account summary. This will provide you with the current overview of your account.
“Fact Sheet: President Biden Announces Student Loan Relief for Borrowers Who Need It Most.” The White House, The United States Government, 24 Aug. 2022.