Student Loan Forgiveness Update and Reminders

October 17, 2022: By Ashley Agnew:

In August, President Biden announced $10,000 of debt relief per federal student loan borrower for those who did not attend college on Pell Grants and $20,000 for those who did. While we wrote on the subject this summer, applications were not yet available upon the announcement. Luckily, the Department of Education has made progress and a beta version of the application is now available and borrowers can complete the application here The Department of Education will use these early applications to help refine and better the forgiveness process, however it has made clear that early applicants will not need to reapply if using the beta version. For best practices we do recommend saving any emails noting the confirmation of your application for personal tracking. 

There have been many questions regarding the impacts of the forgiveness on credit scores. If you qualify for loan forgiveness, you may notice a slight dip in your credit score around the time loan forgiveness hits your account. The good news is that this will be temporary, likely just several weeks or a couple of months, and your score will likely adjust. If you’re curious, here’s why your credit score may slightly decrease: Student loan forgiveness may impact three factors that affect your credit report: account age, credit type, and debt-to-income ratio. 

  • Account age only makes up about 15% of your credit score, but it can be affected when your accounts close, especially the oldest ones. The drop is temporary, and eliminating your loan makes any temporary credit hit well worth it.
  • Credit type makes up 10% of your credit score and includes revolving loans (credit card and HELOC) and installment loans (student loans and mortgages). In general, it helps your score to have a mix of both account types. If student loans are the only installment loan on your credit report, closing them could lead to a more significant drop in your credit score. Credit type is only affected when an account closes. So, if the forgiveness is not enough to close your student loan account, you won’t have to worry until you fully pay your loans.
  • Your debt-to-income ratio (DTI) may improve after receiving $10,000 of debt forgiveness —increasing your chances of being approved for other credit or loans. Your income isn’t factored into your credit report, so your DTI never affects your credit score. However, many lenders calculate your DTI when deciding to offer you credit.

Remember, federal law allows you to receive a free credit report annually. We highly recommend reviewing this annually to gain a better understanding of your score and to scan for any fraudulent activity. 

On that note and in conclusion, the remaining steps of the student loan forgiveness process are yet to be seen, however if you are an applicant you should be aware of the credible emails addresses used by the government in order to reduce your change of identity theft. shares the following important reminder: 


Beware of scams

You might be contacted by a company saying they will help you get loan discharge, forgiveness, cancellation, or debt relief for a fee. You never have to pay for help with your federal student aid. Make sure you work only with the U.S. Department of Education and our loan servicers, and never reveal your personal information or account password to anyone. Our emails to borrowers come from,, or You can report scam attempts to the Federal Trade Commission by calling 1-877-382-4357 or by visiting

We hope you found this information helpful, and although the relief application must be completed by the borrower directly, clients should feel free to reach out to our team with any questions, or if we can be of any assistance in gaining a better understanding of your loan obligations. We are here.