At the moment, there is no new student loan forgiveness plan since the Supreme Court struck down President Joe Biden’s plan in June. Biden’s forgiveness plan would have forgiven up to $20,000 per student and impacted about 90% of student loan borrowers.
Since the Supreme Court denied student loan forgiveness, Biden cannot move forward with the program. Those who were approved for forgiveness will not receive it.
However, the Biden administration is working on a Plan B that could take over a year to materialize. The details of the plan are still being fleshed out.
What you have instead of the loan forgiveness plan are expanded already-existing federal loan repayment plans which eventually lead to forgiveness if you meet all the terms and conditions.
These include the:
- Income-Driven Repayment (IDR) plan under which you qualify for loan forgiveness if you have been making payments for 20 or 25 years based on the type of plan.
Under IDR, Biden has added the Saving on a Valuable Education (SAVE) plan which replaced the existing Revised Pay As You Earn (REPAYE) plan. Under this new plan, undergraduate loan payments would be cut in half, from 10% to 5%. Depending on their income, some people will have no monthly bill.
- The Public Service Loan Forgiveness program under which your debt is forgiven if you work a public service job and have made 120 qualifying payments while working for a qualifying employer.
The Biden administration has made several improvements to the Public Service Loan Forgiveness (PSLF) program, including a temporary waiver, a one-time account adjustment, and proposed permanent improvements such as counting all qualifying payments regardless of loan type or repayment plan. These improvements are designed to make PSLF more accessible and affordable for borrowers and to help them achieve loan forgiveness more quickly.
You can visit the United States Department of Education’s website to understand more about the process of qualifying for loan forgiveness.
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