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Federal Loan Cancellation

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Federal Loan Cancellation

On August 24, 2022, the Biden administration announced the cancellation of federal student and parent loans for millions of borrowers. The current repayment pause for federally-held loans was also extended until December 31, 2022.

How much of my loan debt can be canceled?

  • Up to $10,000 for single borrowers making less than $125,000, or households earning less than $250,000
  • Borrowers who received a Federal Pell Grant while in college can have up to an additional $10,000 in loans canceled – totaling $20,000 in loans being canceled

Please note: Dependent students who received a Federal Direct Loan in 2021 – 2022 will have their loan cancelation based upon their parental income, rather than their own income. Dependent students are those who were required to complete their 2021 – 2022 FAFSA with their parent(s)’ information.

What loans qualify for cancellation?

Any of the following loans where the first disbursement occurred on June 30, 2022 or prior:

  • Federal Direct Subsidized and Unsubsidized Loans
  • Federal Direct Subsidized and Unsubsidized Stafford Loans
  • Federal Direct Graduate PLUS Loans
  • Federal Direct Parent PLUS Loans
  • Federal Direct Consolidation Loans

If you borrowed a Federal Stafford Loan or a Federal Parent PLUS Loan from a private lender under the Federal Family Education Loan (FFEL) program, you can still benefit from the loan cancellation.  You will need to consolidate your Stafford or PLUS Loans into a Federal Direct Consolidation Loan.

More information and the application for the Federal Direct Consolidation Loan are available at https://studentaid.gov/app/launchConsolidation.action

Contact your loan servicer if you are unsure if you borrowed under the FFEL program or the Federal Direct Loan program.  One thing to keep in mind is the FFEL program ended in 2010.  If you borrowed a federal student or parent loan after 2010, it was under the Federal Direct Loan program and consolidation isn’t necessary.

Contact information for your loan servicer can be found at https://studentaid.gov/manage-loans/repayment/servicers

When and how can I apply for loan cancellation?

The U.S. Department of Education does encourage all who are eligible to complete an application when it becomes available in early October. However, if you are currently in an income-driven repayment plan or if you received a federal student or parent loan in 2021 – 2022, the U.S. Department of Education already has your income information and your loans will be canceled automatically. If the U.S. Department of Education does not have your income information, an application will be necessary.

You can sign up to be notified when the application becomes available at https://www.ed.gov/subscriptions

Once I submit my application, how long will it take for my loans to be canceled?

Borrowers can expect to receive relief 4-6 weeks after their application has been submitted. The U.S. Department of Education does recommend submitting an application prior to November 15 to receive relief before the repayment pause ends on December 31.

How long do I have to apply for loan cancellation?

Borrowers have until December 31, 2023 to apply.

What if I made payments or paid off my loans after March 13, 2020?

Per the U.S. Department of Education, borrowers can still request refunds for any federal student loan payments made since March 13, 2020. Any amount paid after August 24, 2022, which brings an eligible borrower below the $10,000 or $20,000 cancellation threshold will automatically be refunded. Borrowers can request a refund by contacting their loan servicer.

Do I have to pay a fee for my loans to be canceled?

NO. Beware of loan cancellation or forgiveness scams. Unfortunately, there are individuals who try to take advantage of student loan borrowers. Here are some examples of false claims you may see:

“Act immediately to qualify for student loan forgiveness before the program is discontinued.”

“Your student loans may qualify for complete discharge. Enrollments are first come, first served.”

“Student alerts: Your student loan is flagged for forgiveness pending verification. Call now!”

Remember: there is no fee to cancel your student loans. Do you not share your personal information with anyone other than Davidson-Davie, your loan servicer, or Student Connections.

More information on how to avoid student loans scams and, if necessary, submit a complaint can be found at

Who do I contact if I have additional questions about loan cancellation or repayment?

Davidson-Davie Community College partners with a company called Student Connections to assist students in repaying their student loans. You can contact Student Connections at 866.311.9410. You can also contact the Davidson-Davie Office of Financial Aid at 336.249.8186.