Student Loan Debt Relief

About Student Loan Debt Relief

Information on this page updated as of October 18, 2022

In response to President Biden’s announcement on August 24, 2022, regarding student loan debt cancellation, the UMFK Office of Student Financial Aid has compiled the following information for our current students and alumni. We expect the U.S. Department of Education to release additional information and details on the student loan debt relief program in the coming weeks. As additional information is released, please watch for more communications from our office.

Information for Current Students

What Is Happening

U.S. Department of Education 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. The relief includes current students and borrowers who have federally held undergraduate, graduate, and Parent PLUS loans where the first disbursement was on or before June 30, 2022.

Who Is Eligible

To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households). If you were a dependent student during the 2021-2022 academic year, this income cap will be based on your parents’ income.

How Much Am I Eligible to Receive

The amount of loan cancellation you are eligible for will depend on the total amount of federal loan debt you have borrowed, as well as if you received a Federal Pell Grant during your time in college. To obtain your federal student loan balance information, as well as information regarding past Federal Pell Grant awards, please visit the Federal Student Aid website. Please note: if you received a Federal Pell Grant prior to 1994, that information won’t display on studentaid.gov, but you will still be eligible to receive the $20,000 benefit.

The Department of Education has a complete record of all students who ever received a Pell Grant, as such, when you submit an application for loan cancellation, you will not be required to provide proof or take any additional action to verify your receipt of a Federal Pell Grant.

1. If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.
2. If you did not receive a Pell Grant in college but still meet the income threshold, you will be eligible for up to $10,000 in debt cancellation.
3. Your relief is capped at the amount of your outstanding federal student loan debt (up to $10,000 or $20,000 if eligible) and will not be applied to any current or past due account balances at the University of Maine at Fort Kent.

What Types of Loans Are Eligible for Cancellation

Below are the types of federal student loans that are eligible for cancellation (provided that they have an outstanding balance as of June 30, 2022):

• William D. Ford Federal Direct Loan (Direct Loan) Program Loans
  • Subsidized loans
  • Unsubsidized loans
  • Parent PLUS loans
  • Graduate PLUS loans
• Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
• Federal Perkins Loan Program loans held by ED
• Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, Parent PLUS, and Graduate PLUS; and Perkins loans held by ED)
• Consolidation loans, as long as all of the loans that were consolidated were first disbursed on or before June 30, 2022

You can determine what types of federal loans you have by logging onto the Federal Student Aid website and following the below steps:

1. Select My Aid in the dropdown menu under your name
2. Navigate to the Loan Breakdown section to see a list of each loan you received
3. Expand the section by clicking View Loans, then select the View Loan Details arrow next to a loan
   1. Direct loans begin with “Direct”
   2. Federal Family Educational Loan Program loans begin with “FFEL”
   3. Perkins Loans contain the word “Perkins”
   4. If the servicer for any FFEL or Perkins Loans you have begins with “Dept. of Ed” or “Default Management Collection System,” then the loan is federally managed/held by the Department of Education

What Do You Need to Do

Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education – and so you will not have to complete any further steps to receive the loan cancellation.

If the U.S. Department of Education doesn’t have your income data, the Administration will launch a simple application which will be available by early October.

When Is It Happening

• October 2022 – If the U.S. Department of Education doesn’t have your income data, the Administration will launch a simple application. You have until December 31, 2023, to apply.
• 4-6 weeks – Once the application is completed, you can expect relief within 4-6 weeks.

What If I Made Voluntary Payments During the Pandemic

Borrowers who made voluntary payments during the pandemic will be eligible to receive a refund of payments if:

• You successfully apply for and receive debt relief under the Debt Relief Plan AND
• Your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you’re eligible to receive but did not pay off your loan in full.

Visit the Federal Student Aid One-Time Student Loan Debt Relief page for additional information on if you may qualify for a refund on voluntary payments made during the pandemic.

Information for UMFK Alumni

What Is Happening

1. U.S. Department of Education 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. The relief includes current students and borrowers who have federally-held undergraduate, graduate, and Parent PLUS loans where the first disbursement was on or before June 30, 2022.
2. To ensure a smooth transition to repayment and prevent unnecessary defaults, the Biden-Harris Administration will extend the pause a final time through December 31, 2022, with payments resuming in January 2023.

Who Is Eligible for Federal Student Loan Relief

To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households). If you were a dependent student during the 2021-2022 academic year, this income cap will be based on your parents’ income.

How Much Am I Eligible to Receive

The amount of loan cancellation you are eligible for will depend on the total amount of federal loan debt you have borrowed, as well as if you received a Federal Pell Grant during your time in college. To obtain your federal student loan balance information, as well as information regarding past Federal Pell Grant awards, please visit the Federal Student Aid website. Please note: if you received a Federal Pell Grant prior to 1994, that information won’t display on studentaid.gov, but you will still be eligible to receive the $20,000 benefit.

The Department of Education has a complete record of all students who ever received a Pell Grant, as such, when you submit an application for loan cancellation, you will not be required to provide proof or take any additional action to verify your receipt of a Federal Pell Grant.

1. If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.
2. If you did not receive a Pell Grant in college but still meet the income threshold, you will be eligible for up to $10,000 in debt cancellation.
3. Your relief is capped at the amount of your outstanding federal student loan debt (up to $10,000 or $20,000 if eligible) and will not be applied to any current or past due account balances at the University of Maine at Fort Kent.

What Types of Loans Are Eligible for Cancellation

Below are the types of federal student loans that are eligible for cancellation (provided that they have an outstanding balance as of June 30, 2022):

• William D. Ford Federal Direct Loan (Direct Loan) Program Loans
  • Subsidized loans
  • Unsubsidized loans
  • Parent PLUS loans
  • Graduate PLUS loans
• Federal Family Education Loan (FFEL) Program loans held by ED or in default at a guaranty agency
• Federal Perkins Loan Program loans held by ED
• Defaulted loans (includes ED-held or commercially serviced Subsidized Stafford, Unsubsidized Stafford, Parent PLUS, and Graduate PLUS; and Perkins loans held by ED)
• Consolidation loans, as long as all of the loans that were consolidated were first disbursed on or before June 30, 2022

You can determine what types of federal loans you have by logging onto the Federal Student Aid website and following the below steps:

1. Select My Aid in the dropdown menu under your name
2. Navigate to the Loan Breakdown section to see a list of each loan you received
3. Expand the section by clicking View Loans, then select the View Loan Details arrow next to a loan
   1. Direct loans begin with “Direct”
   2. Federal Family Educational Loan Program loans begin with “FFEL”
   3. Perkins Loans contain the word “Perkins”
   4. If the servicer for any FFEL or Perkins Loans you have begins with “Dept. of Ed” or “Default Management Collection System,” then the loan is federally managed/held by the Department of Education

What Do You Need to Do

Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education – and so you will not have to complete any further steps to receive the loan cancellation.

If the U.S. Department of Education doesn’t have your income data, the Administration will launch a simple application which will be available by early October.

When Is It Happening

• October 2022 – If the U.S. Department of Education doesn’t have your income data, the Administration will launch a simple application. You have until December 31, 2023, to apply.
• 4-6 weeks – Once the application is completed, you can expect relief within 4-6 weeks.
• November 15, 2022 – Borrowers are advised to apply before this date in order to receive relief before the payment pause expires on December 31, 2022.
• The Department of Education will continue to process applications as they are received, even after the pause expires on December 31, 2022. The final deadline to apply for this relief is December 31, 2023.

What If I Made Voluntary Payments During the Pandemic

Borrowers who made voluntary payments during the pandemic will be eligible to receive a refund of payments if:

• You successfully apply for and receive debt relief under the Debt Relief Plan AND
• Your voluntary payments during the payment pause brought your balance below the maximum debt relief amount you’re eligible to receive but did not pay off your loan in full.

Visit the Federal Student Aid One-Time Student Loan Debt Relief page for additional information on if you may qualify for a refund on voluntary payments made during the pandemic.

Protect Yourself From Scammers

Here’s a list of Do’s and Don’ts to protect yourself against scams as you prepare to apply for debt relief.

• DON’T pay anyone who contacts you with promises of debt relief or loan forgiveness. You will not need to pay anyone to obtain debt relief. The application will be free and easy to use.
• DON’T reveal your FSA ID or account information or password to anyone who contacts you. The Department of Education and your federal student loan servicer will never call or email you asking for this information.
• DON’T ever give personal or financial information to an unfamiliar caller. When in doubt, hang up and call your student loan servicer directly. You can find your federal student loan servicer’s contact information at the Federal Student Aid website.
• DON’T refinance your federal student loans unless you know the risks. If you refinance federal student loans eligible for debt relief into a private loan, you will lose out on important benefits like one-time debt relief and flexible payment plans for federal loans.
• DO create an FSA ID at StudentAid.gov. You will not need it for the debt relief application but having an FSA ID can allow you to easily access accurate information on your loan and make sure FSA can contact you directly, helping you equip yourself against scammers trying to contact you. Log in to your current account on StudentAid.gov and keep your contact info up to date. If you need help logging in follow these tips on accessing your account.
• DO make sure your loan servicer has your most current contact information. If you don’t know who your servicer is, you can log into StudentAid.gov and see your servicer(s) in your account.
• DO share these messages with your networks and encourage others to sign up at www.ed.gov/subscriptions to be notified when the Student Loan Debt Relief application becomes available.
• DO report scammers to the Federal Trade Commission by visiting reportfraud.ftc.gov.

Having the most up-to-date and accurate information is your best protection against scammers.

You will hear directly from the Department of Education or Federal Student Aid when the application for debt relief is available. if you qualify for debt relief without needing to fill out an application, you will also hear from the Department or FSA directly. For additional information, visit Federal Student Aid’s FAQ page on student debt relief.

Additional Resources

• Federal Student Aid: One-Time Student Loan Debt Relief
  Comprehensive information and Q&A regarding the one-time cancellation Debt Relief Plan.
• Federal Student Aid Website
  The Federal Student Aid website provides past and current students with a full history of all Federal Grants and Federal Loan history (including amounts and servicer information). Students and borrowers should log onto this site using their FSA ID information. For assistance retrieving your FSA ID, visit Federal Student Aid’s page on how to create an FSA ID.
• The White House: Student Debt Relief Fact Sheet
  Provides the official statement from President Biden and a fact sheet regarding the federal student loan forgiveness announcement.
• Federal Student Aid: Student Debt Relief Plan Explained
  The Department of Education’s information on the student loan forgiveness plan.
• U.S. Department of Education Subscriptions
  Provide an email address to the Department of Education and subscribe for updates to the federal student loan forgiveness plan, including when the process has officially opened.
• The White House: Public Service Loan Forgiveness
  Additional information regarding additional flexibilities and adjustments to the Public Service Loan Forgiveness program.