Those of you who have been diligently paying off your federal student loan debt will have been happy to hear that the President just signed a package to help alleviate some of your debt (and pain). There are a few basic things to know about this plan.

First, this package refers to FEDERAL loan debt only — not bank or private loans you may have taken out to help you pay for college. So, if you borrowed from a bank or a kind family member, you still owe everything to those loans.

Here is what you need to know:

1. Due to the economic challenges of the pandemic, the government has paused student loan repayment a number of times. No one has had to pay anything to their federal loans for over two years now. The final extension, or pause, will end on Dec. 31, 2022. All payments will resume in January of 2023. This is being done so there will be a smooth transition to repayment amounts amidst the changing amounts of the loans. You do NOT need to do anything to extend your loan pause; it will occur automatically.

2. The government is targeting low to middle income families with this debt relief package. The Department of Education is going to provide UP TO $20,000 in debt cancelation to Pell Grant recipients with loans held by the Department of Education, and UP TO $10,000 in debt cancelation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households.

“UP TO” means if you are eligible for $10,000 of relief, but your loan balance is $5,000, you will only receive $5,000 in relief.

Additionally, borrowers who are employed by the military or federal, state, tribal or local government MAY be eligible to have all of their student loans forgiven through the Public Service Loan Forgiveness (PLSF) program. For more information on eligibility and deadlines for PLSF, go to PSLF.gov. To be eligible to receive loan forgiveness, make sure the Department of Education has your updated income data.

There will be a simple application to complete that will be available in early October. If you would like to be notified when the application is available, sign up on the Department of Education subscription page.

Once the application is complete, you should get relief in about 4-6 weeks. Borrowers should apply BEFORE November 15 to receive relief before the payment pause expires on December 31.

For more specific information about the Debt Relief Plan, you can find the link to the Federal Student Aid website on the Financial Aid page of my website, Thecollegeauntie.com.

And don’t forget, the FAFSA (Free Application for Federal Student Aid) goes live on October 1. If you are returning to college, or plan to attend in the fall of 2023, the application should be completed as early as possible for the best chance at available aid. Most schools will require that the FAFSA be completed prior to considering a student for their own institutional aid, so even if you don’t think you will qualify for Federal Aid, make sure to complete it anyway. A link to the FAFSA can also be found on my website.

Maryanne Hogan is an Independent College Counselor serving the students of Maui. For more information, or to make an appointment, visit her website at Thecollegeauntie.com.