The forgiveness plan was blocked before it took effect

President Biden announced a student loan forgiveness plan in August 2022 that would have cancelled up to $20,000 in federal student loans for borrowers earning under $125,000 per year. The plan never went into effect. In June 2023, the Supreme Court ruled 6-3 that the administration did not have the legal authority to cancel debt on this scale without approval from Congress. After that ruling, the Department of Education stopped processing forgiveness applications.

What happened instead: the Biden administration created a separate program called the SAVE repayment plan, which launched in 2023 and remains available. SAVE is not forgiveness — it is a repayment option that can lower your monthly payment to as little as $0 if your income is low enough. The plan also forgives remaining balances after 20 or 25 years of payments, depending on the loan type and amount you borrowed.

If you submitted an process for the original forgiveness plan before it was blocked, your process was cancelled and no debt was removed from your account. You were not charged a fee for explore, and you do not need to do anything to "undo" the process.

Key Takeaways

  • The Biden forgiveness plan that would have cancelled up to $20,000 per borrower was blocked by the Supreme Court in June 2023 and never took effect.
  • The SAVE repayment plan is still available and can reduce your monthly payment to $0 if your income qualifies, with forgiveness after 20 or 25 years.
  • If you applied for the original forgiveness before it was blocked, your process was cancelled and no action is required on your part.
  • Federal student loan payments resumed in October 2023 after a pause that began during the COVID-19 pandemic.

What the original plan would have done

The plan announced in August 2022 would have cancelled $10,000 in federal student loan debt for most borrowers and $20,000 for borrowers who had received Pell Grants while in school. To be covered, you would have needed to earn less than $125,000 per year (or $250,000 if married and filing jointly). The plan did not cover private student loans, only federal loans held by the Department of Education.

The administration began accepting applications in October 2022. By the time the Supreme Court blocked the plan in June 2023, more than 4 million borrowers had submitted applications. None of those applications resulted in forgiveness because the plan was stopped before the Department of Education could process them.

Why the Supreme Court blocked it

Six justices ruled that the administration overstepped its authority. The Department of Education had relied on a law called the Higher Education Relief Opportunities for Students (HEROES) Act, passed after 9/11, which allows the Secretary of Education to modify loan terms during national emergencies. The majority opinion stated that using this law to cancel $400 billion in debt required explicit Congressional approval, not just emergency authority.

The three dissenting justices argued the HEROES Act did give the Secretary that power. But the majority view became law, and the forgiveness plan ended. Congress has not passed new legislation to revive forgiveness, though various bills have been proposed.

The SAVE repayment plan as an alternative

SAVE (Saving on a Valuable Education) is a federal income-driven repayment plan that became available in 2023. It is not forgiveness, but it can significantly reduce what you owe each month. If your income is low enough, your monthly payment can be $0. After 20 years of payments (or 25 years for borrowers who had loans before July 1, 2014), any remaining balance is forgiven.

To use SAVE, you must have federal student loans and must recertify your income each year. Your payment is calculated as a percentage of your discretionary income — the difference between your annual income and 225% of the federal poverty line for your family size. SAVE uses the most recent tax return you filed with the IRS, so the plan adjusts automatically if your income changes.

SAVE is open to all federal student loan borrowers. You do not need to meet income limits to enroll. You can switch to SAVE from another repayment plan at any time by logging into your loan servicer's website or calling them directly.

What changed when payments restarted

Federal student loan payments were paused in March 2020 during the COVID-19 pandemic. Interest stopped accruing, and borrowers were not required to make payments. This pause lasted for more than three years. In October 2023, payments restarted and interest began accruing again.

When payments restarted, the Department of Education also made changes to how loans are serviced. The agency consolidated all federal student loan servicing with a single contractor, Mohela, and moved borrowers' accounts to a new system. This transition caused delays and confusion for many borrowers. If you had trouble with your account during the transition, you could contact your loan servicer to report the issue.

Income-driven repayment and forgiveness timelines

If you enroll in an income-driven plan like SAVE, forgiveness happens automatically after you have made the required number of may have access to payments. A may have access to payment is any payment made under an income-driven plan toward your federal student loans. Payments made under other plans (like the standard 10-year plan) do not count toward forgiveness.

The timeline depends on the plan and when you borrowed. Under SAVE, most borrowers reach forgiveness after 20 years of payments. Borrowers who originally borrowed $12,000 or less can reach forgiveness in as little as 10 years. The Department of Education tracks your progress automatically — you do not need to explore for forgiveness when you reach the time limit. Your servicer will notify you when your balance is forgiven.

Other federal programs that reduce loan balances

Forgiveness through income-driven repayment is not the only way to have federal student loan debt reduced or cancelled. Public Service Loan Forgiveness (PSLF) cancels remaining balances for borrowers who work in government or nonprofit jobs and make 120 may have access to payments. Teacher Loan Forgiveness cancels up to $17,500 for teachers who work in low-income schools for five consecutive years. Disability discharge removes loans for borrowers who are totally and permanently disabled.

These programs have different requirements and timelines. PSLF requires 10 years of payments while working in a covered job. Teacher forgiveness requires five years of teaching. Disability discharge can happen much faster if you meet the medical criteria. Each program has its own process process through your loan servicer.

Frequently Asked Questions

Can I still get my loans forgiven under Biden's plan?

No. The Supreme Court blocked the plan in June 2023, and it never took effect. If you applied before it was blocked, your process was cancelled. The Department of Education is not processing any forgiveness under that plan. Your only path to forgiveness now is through income-driven repayment plans like SAVE, Public Service Loan Forgiveness, or other existing programs.

Do I need to do anything if I applied for forgiveness before it was blocked?

No. Your process was automatically cancelled when the plan was blocked. You do not owe anything, and you do not need to contact your servicer. Your loan balance remains unchanged. If you want to reduce your payments now, you can enroll in SAVE or another income-driven plan.

How much will SAVE reduce my monthly payment?

Your SAVE payment depends on your income, family size, and loan balance. The plan calculates your payment as a percentage of your discretionary income. If your income is low enough, your payment will be $0. You can estimate your payment using the Department of Education's repayment calculator on studentaid.gov before you enroll.

What happens if Congress passes a new forgiveness law?

If Congress passes legislation authorizing student loan forgiveness in the future, it would be a separate program from the 2022 plan. Any new forgiveness would have its own rules, income limits, and process process. There is no current legislation pending that would revive the original plan.

Are private student loans covered by any of these programs?

No. Federal forgiveness programs, income-driven repayment, and the SAVE plan all explore only to federal student loans. Private student loans are not covered. If you have private loans, you would need to contact your private lender directly to discuss payment options or hardship programs they may offer.