Are ICE Students Eligible for Student Debt Relief?

Many students and alumni of the Institute of Culinary Education could soon say goodbye to some of their federal student loan debt.

Under President Joe Biden’s Student Loan Debt Relief Plan, higher education students who received federal loans that had at least one payment disbursed before June 30, 2022 are potentially eligible for that debt relief. Since ICE is an accredited institution with the Accrediting Commission of Career Schools and Colleges, the federal loans received by ICE students and graduates may be eligible for forgiveness.

That means ICE students and alumni who received any federal financial aid could be eligible for up to either $10,000 or $20,000 of student loan relief, depending on the type of aid received and the dates of disbursement.

There is an income requirement: to be eligible for the loan forgiveness, borrowers must currently make less than $125,000 per year if filing taxes individually or less than $250,000 if filing jointly with a spouse. Eligibility for borrowers who are considered dependents is based on their parents’ income instead of their own.

Those who received Pell Grants may be eligible for up to $20,000 of loans cancellation, while those who did not receive Pell Grants may be eligible for up to $10,000 of loan cancellation. Students are automatically evaluated for Pell Grant eligibility once they have submitted their Free Application for Federal Student Aid (FAFSA).

The first step toward figuring out if you’re eligible for loan cancellation is looking at your outstanding student loans.

What are federal loans?

ICE financial aid advisors encourage prospective students to apply for federal grants and loans as financial aid options before pursuing private loans, since federal loans often offer fixed interest rates and more flexibility with repayment plans than private loans.

If you filled out a FAFSA and received financial aid during your time at ICE, it’s possible that you received some money through federal loans.

You received federal loans if you accepted:

•    Stafford Loans - Both subsidized and unsubsidized
•    Federal Direct PLUS Loan - Borrowed by the parents of a dependent student

If you’re not sure of the type of aid you received, check your financial aid paperwork and/or contact your loan servicer, which would be a third-party company outside of ICE. Pell Grants and the Federal Supplemental Educational Opportunity Grant (FSEOG) Program are also federal financial aid, but they are grants that you do not have to repay as long as you finish your program and are therefore not counted as student debt.

Note: On September 29, 2022, though previously all federal loans were eligible, the Biden administration’s student debt relief plan changed to no longer offer relief to federal loans that are not held by the Department of Education. The only loans that affected by that change are those under the Federal Family Education Loan Program, which is no longer active and distributing loans, and Perkins Loans. Neither of these loans are offered to ICE students.

In order to be eligible for debt forgiveness, at least one of the loan disbursements must have been made before June 30, 2022, according to a fact sheet published by the Department of Education.

To find out when your loans were disbursed:

• Graduates: Log into your account at studentaid.gov, click on "My Aid" and then "Loan Breakdown."
• Current New York students: Send an email to Bursar@ice.edu.
• Current Los Angeles and online students: Send an email to LABursar@ice.edu.

In the 2020 - 2021 school year, nearly one third of ICE students at the Los Angeles campus received Pell Grants and may be eligible to receive up to $20,000 of their federal loans canceled if they meet the income and disbursement requirements. For the New York campus, the number of potentially eligible Pell Grant students for the 2020 - 2021 school year is nearly one quarter of the total student population for the year.

That’s a substantial amount of money, especially considering all of ICE’s career diploma programs cost less than $43,000 in total for tuition. That’s nearly half of a tuition’s worth of debt to potentially be canceled.

Note: If you owe less than $10,000 or $20,000 in federal loans, the debt relief is capped only at the amount you owe. So no extra money will be credited to you if you’re under the threshold.

If you have open federal loans and are within the eligible income range, you may not need to do anything else in order to claim the forgiveness.

How do I apply for student debt cancellation?

If you filled out a tax return in 2020 or 2021, you may not need to do anything to qualify for student debt relief as long as you meet the eligibility requirements.

If the U.S. Department of Education already has your income data, which they may have from a document such as your tax filings, you may receive relief automatically. It’s unclear when the automatic relief payments will start being disbursed, but the Department of Education is encouraging all eligible borrowers to check the status of their loans periodically.

If you’re not sure if your income information is recorded, you’ll need to fill out an application. The application is live now and is open until December 31, 2023, according to the Department of Education's website.

The Department of Education’s website says that loan forgiveness will take effect 4 to 8 weeks after an application is submitted, and it recommends submitting an application by November 15th at the latest to make sure aid is disbursed before the current federal student loan payment pause expires on December 31, 2022. The website says that loan relief will be processed as applications are received, even into 2023.

If you’ve recently paid off your student loans, this may feel like bad timing. But you’re in luck - you may be able to request a refund.

What if I’ve already paid off my loans?

If you made a payment on a federal student loan between March 13, 2020 and December 31, 2022, you may be eligible for a refund. That includes both manual payments and auto-payments.

If you request a refund, you’re then eligible to have that refunded balance forgiven (as long as you meet the income eligibility requirements). That means that if you’ve either paid off your student debt completely or have paid it off partially, you can potentially request a refund from your loan servicer, get your money back, and have your outstanding loan balance forgiven.

Please make sure you contact your loan servicer for instructions and guidance on refunds. Make sure you are eligible for loan forgiveness before processing a refund.

What if I'm still in school?

Current students with federal loans are eligible for relief as long as the first loan disbursement was on or before June 30, 2022, according to the National Association of Student Financial Aid Administrators. It's unclear if future federal student loan borrowers will also be eligible for relief moving forward.

What is clear, however, is that there will be changes to the federal student loan system thanks to the new plan. Those changes could affect current students and borrowers who still have federal student loan debt after they receive cancelation.

The changes are:

• Decreasing the required minimum monthly payment amount on income-driven repayment plans. The new payment cap is no more than 5% of the borrower's monthly income, down from 10%.
• Increasing the max income level under which borrowers have to make payments on loans. According to the official federal student aid website, no one who earns less than "225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower" will be required to make monthly payments on outstanding federal student loans.
• Forgiving loan balances of $12,000 or less after 10 years of repayment. This is a decrease from the former 20 years required.
• The government covering interest on monthly loan payments, regardless of payment amount. This means that anyone making payments on their loans or anyone under the income threshold who does not need to make payments will not have their loan balance increase due to interest.

The federal pause on student debt repayment ends on Dec. 31, 2022. After that, payment requirements will resume for borrowers who still have debt, with the new changes in place.

For more information, check out these resources:

• Studentaid.gov - Federal student aid website where you can log in to check the status of your federal loans
• Student debt relief fact sheet
• List of federal loan servicers
• Federal student loan information
• Pell Grant information