Approximately 25 million student loan borrowers may soon have loan forgiveness. Here's what you need to know.

• Millions of borrowers are receiving emails from the Biden administration regarding its new student debt cancellation plans.
• Here's what to know.

This week, the Biden administration is emailing millions of borrowers about its new student debt cancellation plans.

The U.S. Department of Education has informed us of a potential relief, as stated in an email that CNBC has reviewed.

The Department of Education estimates that at least 25 million borrowers could qualify.

Who will be eligible?

On the same day that the Supreme Court thwarted President Biden's initial effort to provide student loan forgiveness, the White House declared its intention to explore alternative methods of delivering relief.

The Education Department revised its forgiveness plan to be more targeted in the hope that it will survive legal challenges.

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In its email to borrowers, the department lists four categories of eligibility.

Those are:

1. Borrowers who owe more than they did at the start of repayment.
2. Individuals who repaid their undergraduate loans before July 1, 2005, or graduate loans before July 1, 2000, are eligible for loan forgiveness.
3. Those who are eligible for student loan forgiveness under the government's existing programs but have not yet applied.
4. Students from "low-financial value" programs.

Is there anything I need to do?

No application is required for those who want to be included in the relief, the Education Department stated.

If a borrower chooses to opt out of debt forgiveness, they must inform their loan servicer by Aug. 30.

When could I see the relief?

The final rule on debt relief from the Education Department is expected to be published in October. After its release, the department is likely to swiftly cancel loans to avoid legal disputes, according to Luke Herrine, an assistant professor of law at the University of Alabama.

Undoing something is often more difficult than preventing it from happening, according to Herrine.

If the administration doesn't wait, opponents will have to file a lawsuit hastily and with incomplete information, according to Herrine.

Higher education expert Mark Kantrowitz stated that opponents of the relief may already be ready to oppose it.

A lawsuit is likely to be filed on the day the rule is finalized, seeking a temporary injunction to prevent the Biden administration from forgiving loans, according to Kantrowitz.

Borrowers may have to wait for months or longer for relief, as the case may be taken back to the Supreme Court and its outcome is uncertain.

Will I owe taxes on any forgiven debt?

The American Rescue Plan Act of 2021 has made student loan forgiveness federally tax-free through 2025.

However, some borrowers could still see a state tax bill.