Have student debt? Make sure you didn’t miss this email

(NEXSTAR) — Despite various legal challenges targeted at efforts to forgive large swaths of federal student loan forgiveness, the Biden administration has launched yet another attempt at debt relief.

And if you got an email Thursday regarding debt relief from the Department of Education, know that it isn’t spam.

On Wednesday, the Department of Education announced that, in its “next step toward providing student debt relief to tens of millions of borrowers this fall,” it would begin emailing certain borrowers to “provide updates on potential student debt relief.”

As of Thursday morning, those emails have started reaching many borrowers’ inboxes.

Here’s what to know if you have — or have not — received an email.

What is the email about?

As the Education Department explained, the emails provide an update on a potential round of debt relief, as well as information about how to opt out of it.

The department notes that it is still working to finalize the new regulations that would make more than 30 million student loan borrowers eligible for debt relief, including those who have already seen forgiveness over the last three years.

If you want to be included in the debt relief, you don’t have to do anything.

Can I opt out of the potential debt forgiveness?

Those who do not want to see the forgiveness on their loans held by the Education Department, if it’s approved, have until August 30 to call their student loan servicer and opt out. While all borrowers of at least one federally-held loan are set to receive the update, the Federal Student Aid (FSA) office notes that you can opt out of debt relief, even if you didn’t get an email.

However, if you opt out of the potential debt relief, the FSA says you will also opt out of “forgiveness in an income-driven repayment (IDR) plan for the next several months.”

“If you opt out, we will automatically reevaluate your eligibility for forgiveness under IDR in the future; you won’t need to take any action for that to occur,” the FSA explains.

Who would qualify if the debt relief happens?

While the new regulations are still in the works, the Department of Education has said that, if those rules are finalized as-is, four groups of borrowers, all with loans in repayment, would qualify for some or total debt relief:

• Borrowers owing more now on consolidated or select unconsolidated loans than they did when they entered repayment because of “runaway interest.”
• Borrowers with only undergraduate loans who entered repayment on or before July 1, 2005; or those with at least one graduate loan who started repayment on or before July 1, 2000.
• Borrowers who haven’t applied but are eligible for loan forgiveness through an income-driven repayment plan, closed school discharge, or other types of forgiveness.
• Borrowers who attended a low-financial value program (“an institution that failed to provide sufficient financial value, or that failed one of the Department’s accountability standards for institutions”).

Remember, though, that this debt relief only covers some federal student loans and not private student loans.

What would the debt relief look like?

According to the Education Department, should the rules be approved, borrowers would not need to do anything to receive relief as it can “automatically assess” a borrower’s eligibility.

Borrowers owing more than they did when repayment began could see debt cancellation of “up to the amount by which the borrower’s current balance exceeds the principal and interest balance when the loans entered repayment or $20,000, whichever is less.” If the borrower is enrolled in an IDR plan and meets the income requirements, their principal and interest above the principal interest balance, as well as their interest balance at the time repayment began, would be canceled. Consolidated loan amounts would be compared to the initial balances of the initial loans.

Those who qualify for forgiveness under an IDR or other forgiveness plan and those who have been in repayment “a long time” would see some or all of their loans canceled. The same can largely be said for borrowers who attended low-financial value programs, though the FSA notes that loans used to attend such schools or programs during a specific timeframe could be entirely forgiven.

It’s unclear how that loan forgiveness would be dispersed and how quickly it would happen.

Will the debt forgiveness happen?

It’s too soon to say.

The Education Department warned Wednesday the relief rules have not been finalized and receiving an email “does not guarantee specific borrowers will be eligible.” Those rules are expected to be finalized sometime this fall.

Efforts to forgive federal student loans have faced setbacks, including the Supreme Court’s ruling last summer that stopped more than 40 million borrowers from receiving debt relief and two recent federal injunctions that upended the SAVE plan.

As The Hill reports, the Supreme Court could take up the case regarding the SAVE plan.

More federal student debt has been forgiven under President Biden than during any administration. Data from the Education Department shows more than 4.5 million borrowers have seen roughly $168.5 billion in debt relief over the last three years.