BONUS: Student Loan Forgiveness FAQ

August 25, 2022

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The following article may contain affiliate links or sponsored content. This doesn’t cost you anything, and shopping or using our affiliate partners is a way to support our mission. I will never work with a brand or showcase a product that I don’t personally use or believe in.

President Biden has announced his plan for federal student loan relief

The TLDR from the White House website: “The 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. Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5% of incomes – will benefit from this action. To ensure a smooth transition to repayment and prevent unnecessary defaults, 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.”

This is incredible news!

This program will provide relief for MANY Americans struggling with predatory student loans, and extends the pause on payments, giving those who still have balances some extra breathing room before payments resume on January 1st, 2023.

In this quick hit bonus episode, Tori goes over who is affected by this forgiveness plan, and gives a few quick tips on how to prepare for the future, regardless of if your loans qualified.

We will have more resources to come, but this is a great episode to give you a quick overview of what’s happening and how to plan for the future. 

Student Loan Relief Information:

StudentAid.Gov Website

Official White House Press Release

Public Service Loan Forgivness (for public service: federal, state, local, tribal government or a non-profit organization) 

Student Debt Resources:

Refinance Your Loans with Juno (we recommend only refinancing private student loans, since refinancing a federal loan may disqualify you from further forgiveness)

Debt Money Tools

Debt Defeater: Exactly How to Understand, Make a Plan, and Pay Off Your Debt— Without Shame & Judgement

Blog: The Best (And Worst) Advice for Paying off Debt

Blog: How Kristen Paid off $25,000 of Debt

Blog: Breaking Down Dave Ramsey’s Advice

Blog: How to Save for College

Blog: Why Do Women Have the Most Student Loan Debt?

Financial Feminist Podcast

HFK Career Resources

General Money Resources:

Feeling Overwhelmed? Start here!

Our HYSA Recommendation

Order Financial Feminist Book

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Behind the Scenes and Extended Clips on Youtube

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Tori Dunlap (00:11):

Hello, financial feminists. Hello. Today’s going to be a little different. We are going to be quick and dirty today. We are giving you the student loan forgiveness frequently asked questions answers, everything you need to know about President Biden’s recent announcement about student debt forgiveness, about potentially future student debt forgiveness. We’re going to answer every question that we can today in a very short, actionable episode. We’re literally recording this the day before it comes out, and we’re doing this because we know this info is valuable and we know it’s important.

            And share it with your friends. Share it with your peeps, because I want every single person who qualifies for student debt forgiveness to get it.

            Okay. Let’s dive right in immediately. So student loan forgiveness was announced yesterday by President Biden for anyone making less than $125,000 a year or $250,000 for a married couple. Up to $10,000 of debt will be canceled. If you are a Pell grant recipient, that goes up to 20,000. So again, $10,000 in student debt cancellation to non-Pell grant recipients making less than $125,000. If you are a Pell grant recipient, that goes up to $20,000.

            In addition, President Biden announced that the pause on federal student loan repayment will be extended one final time through the end of this year. And they should expect to resume payments in January of 2023, January of next year.

            Okay. A couple fun facts about this. A $10,000 student loan forgiveness plan would wipe out the student ba
lances of around 31% of students while halving the student debt balances of another 21% of borrowers. So this impacts over half of the people, half of Americans who have student loan debt, which is millions of people. But in 2019, one of the healthiest periods of the economy, 10 million borrowers were still behind on their payments.

            So while we applied progress today, tomorrow we demand more. This is hugely impactful, especially for students of color. Ninety percent of Black students took out loans. Over 75% of Latino students took out loans. So for especially lower income students, minority students, this is a huge win. But more progress is needed.

            So today, we celebrate. We pop a little bit of champagne. And tomorrow, we demand better and go back to work.

            Now, what about private student loans? Unfortunately, private student loans are exempt from the student loan forgiveness. Fucking sucks, but this only applies to federal student loans. Kristen, our lovely podcast producer, gave a full two thumbs down and a tongue all the way out, because I know that she is one of the people and one of the millions of Americans who has private student loans. So in terms of paying down private student loans, this doesn’t really affect you. I’m sorry. It doesn’t affect you.

            We’ll put resources in the show notes, including a platform that we love called Juno to potentially lower your interest rate for student loans, as well as a couple tips to pay them off. But if you have private loans, this doesn’t change really anything.

            If you do have federal loans and you qualify, you’re one of those Americans who has fit the qualifications, we will also link down below where you go to actually submit your information. To my knowledge, it’s not going to happen automatically. You have to go submit your information. So please, again, if you’re one of those people and you qualify, or if you don’t know if you qualify, go check, and then go actually apply for this. I don’t want you missing out on either entire student debt forgiveness or at least a little bit of help because you thought it would just happen on its own.

            The other question I saw a lot from our post yesterday and our community was, “Is more coming? Should I expect more student debt forgiveness?” This is why policy change has to be coupled with personal finance education is, yes, we hope more policy change is coming. We hope more student debt forgiveness is coming. However, we cannot rely on it. If you were that person who’s like, “Yeah, I’ll just not pay any of my loans and default on them because forgiveness may be question mark,” not the right way to go.

            So you need to couple voting and policy change and supporting candidates who support student loan forgiveness with also having a plan to pay those loans off.

            If you are one of the people who has federal student loans, but you make over $125,000 a year or $250,000 for married couples, right now student debt forgiveness does not apply to you. Now, it gets a little murky on how much income. I saw a post from one of our community members who’s like, “I work as a nurse and I had overtime. And so I made more than $125,000 last year.” I am not an accountant. There’s a lot of news still coming through. But please again, go check. If you’re close to $125,000, if you’re a little bit over, might be worth going and checking.

            The other significant thing about President Biden’s announcement is that income based repayment plans are changing the cap. Before, the cap on these plans was 10% of your monthly discretionary income. So if you had an income based repayment plan, it was capped at 10%. Now, it’s capped at 5%. So that should offer a little bit of temporary relief as well.

            Okay. Let’s go through some quick guidance steps as we are wrapping up.

            First, take a deep breath. Relax. This is good news for so many people. But again, without meaningful forgiveness, without understanding the root of these student debt crisis, this is just another reprieve. So here’s how to make sure you’re prepared if a pause is not extended, and it’s looking like it won’t be extended past December.

            Buff up your emergency fund when payments are paused right now. Do everything you can to increase your emergency fund. If you can afford payments, keep making them, because right now your interest is not accruing. We’ve discussed this on the show before, but the way to pay off debt is by contributing money to the principal, because that’s the original amount of money you took out. This is why debt feels like you’re drowning, as you’re often having to put money towards not just the principal, but also the interest. So if interest is not accruing right now, it’s a great time to make a dent in those student loans.

            We also want to figure out what our payments would be when the loan resumes and work towards figuring out what’s going to happen, right? Getting a plan together so that you are prepped and ready come January 2023. And if you do have private loans, look into potentially refinancing them. Again, we’ll link down below a couple of resources for that.

            You also have the opportunity to negotiate both your everyday bills, your pay, and eventually actually your loan. You could potentially negotiate the interest rate on your loan. In addition, whether you have loans or not, whether they’re paused or not, now is a great time to do some negotiation. We have a whole episode, episode 19, about how to negotiate with confidence. You can negotiate your everyday bills, your phone bill, your cable bill, in order to cut down your expenses, negotiating your pay, making sure you are being compensated fairly, especially during times of inflation. You can also sometimes negotiate your interest on your loans, again, links below, or actually negotiate your payment plan.

            Especially if you’re low income, especially if you’re already struggling to make ends meet and to pay your loans, put in a call to your student loan provider. Tell them your current situation. Tell them, “This is what I can afford to pay.” And they might give you some flexibility. We’ve seen it work before.

            Again, we put so many more resources in our show notes. We are doing this quick and dirty episode to make sure that we are giving you some information you need. But I want to make sure that you know everything you need to and that you’re armed with the tools and the resources you need to k
now if the student debt forgiveness makes sense for you, if it’s something you qualify for, and to get a plan together if you have private loans, if the forgiveness doesn’t apply to you, et cetera.

            I will say it again. The student debt crisis is a crisis not because of personal decisions, but because of a lack of support at the societal systemic level. So while we applaud progress today, we demand better tomorrow.

            If you did have some of your student debt, all of your student debt forgiven today, congratu-fucking-lations. Go get yourself an ice cream cone. Pop a bottle of champagne. It’s a very exciting thing.

            And I doubt you’re listening to this podcast if this is you. But if you are the person who is thinking, “Well, I had to put myself through college. I had to pay off my loans. Fuck everybody else,” politely, that’s not the vibe. That is not the vibe today. Yes. Maybe it sucks that you had to contribute more money. It sucks that maybe you don’t get student debt forgiveness. However, just because I might not be getting front row seats to Harry Styles doesn’t mean that I’m upset when someone else does. So if you are that person, check yourself before you wreck yourself, AKA, go and tweet some shit.

            And if you are the person who’s a little bummed today because maybe you make too much money, maybe you have private loans, maybe it’s just not something that is affecting you, I’m sorry. I see you. I hear you. We’re here to support you. And we hope that this is one step of many towards broader forgiveness.

            As always, financial feminists, we appreciate you being here. Thank you for coming with us on this little spontaneous news alert journey on Financial Feminist. And please do share this episode with the people who need it most. See you later.

            Thank you for listening to Financial Feminist, a Her First $100K podcast. Financial feminist is hosted by me, Tori Dunlap, produced by Kristen Fields, marketing and administration by Karina Patel, Olivia Coning, Cherise Wade, Alina Hilzer, Paulina Isaac, Sophia Cohen, Valerie Oresko, Jack Coning, and Ana Alexandra, research by Ariel Johnson, audio engineering by Austin Fields, promotional graphics by Mary Stratton, photography by Sarah Wolfe, and theme music by Jonah Cohen Sound.

            A huge thanks to the entire Her First $100K team and community for supporting the show. For more information about Financial Feminist, Her First $100K, our guests, episode show notes, and our upcoming book, also titled Financial Feminist visit


Tori Dunlap

Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over one million women negotiate salary, pay off debt, build savings, and invest.

Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.

With a dedicated following of almost 250,000 on Instagram and more than 1.6 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”

An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.

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