Keep an eye on your inbox: 25 million student loan borrowers to get email on forgiveness

Keep a sharp eye on your email inbox in the coming days and weeks, student loan borrowers. Buried amongst the spam mail and coupons may be the latest information on debt forgiveness.

The Biden administration has taken its next steps toward a solution for borrowers after his initial forgiveness plan was struck down in the Supreme Court in June 2023. The new initiative could provide relief for millions of Americans and even total cancelation of repayment for some.

Originally announced back in April, the White House said that, if implemented as proposed, the plan "would bring the total number of borrowers getting relief under the Biden-Harris Administration to more than 30 million."

Now, roughly 25 million borrowers are expected to receive emails with the next steps starting this week, the U.S. Department of Education announced on Wednesday.

“Starting tomorrow, the U.S. Department of Education (Department) will begin emailing all borrowers with at least one outstanding federally held student loan to provide updates on potential student debt relief,” the department said in an announcement.

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The emails will also provide information on how to opt out if they do not want to receive relief. People looking to opt out will have until August 30 to contact their loan servicer and will not be able to opt back in, according to the department. They will also be temporarily opted out of forgiveness due to enrollment in income-driven repayment plans until the department can automatically assess their eligibility for further benefits.

Eligible Americans will receive a follow-up email with additional information after the rules of eligibility and forgiveness are finalized in the fall.

"The rules that would provide this relief are not yet finalized, and the email does not guarantee specific borrowers will be eligible," the announcement also warned.

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How will be eligible for relief?

Under the rules drafted in April, the Biden administration named four specific classes of borrowers who would be eligible for relief under the proposed plan. These include:

• Borrowers who owe more now than they did at the start of repayment. Borrowers would be eligible for relief if they have a current balance on certain types of Federal student loans that is greater than the balance of that loan when it entered repayment due to runaway interest. The Department estimates that this debt relief would impact nearly 23 million borrowers, the majority of whom are Pell Grant recipients.
• Borrowers who have been in repayment for decades. If a borrower with only undergraduate loans has been in repayment for more than 20 years (received on or before July 1, 2005), they would be eligible for this relief. Borrowers with at least one graduate loan who have been in repayment for more than 25 years (received on or before July 1, 2000) would also be eligible.
• Borrowers who are otherwise eligible for loan forgiveness but have not yet applied. If a borrower hasn’t successfully enrolled in an income-driven repayment (IDR) plan but would be eligible for immediate forgiveness, they would be eligible for relief. Borrowers who would be eligible for closed school discharge or other types of forgiveness opportunities but haven’t successfully applied would also be eligible for this relief.
• Borrowers who enrolled in low-financial value programs. If a borrower attended an institution that failed to provide sufficient financial value, or that failed one of the Department’s accountability standards for institutions, those borrowers would also be eligible for debt relief.

“No application will be needed for borrowers to receive this relief if these plans are implemented as proposed,” said the announcement.

U.S. Secretary of Education Miguel Cardona said in a statement that the current administration made a commitment to deliver relief to followers and the department nearing the "end of the lengthy rulemaking process," leading them "one step closer to keeping that promise.”

“Today, the Biden-Harris administration takes another step forward in our drive to deliver student debt relief to borrowers who’ve been failed by a broken system,” he said. “These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others."