On August 24, 2022, President Biden and the Department of Education announced a program to "cancel" up to $20,000 of eligible borrower’s federal student debt. On June 30, 2023, the U.S. Supreme Court struck down the proposed program. As a result, borrowers will not see cancellation under the program. If you were “approved” for the relief and took steps based on that representation, please reach out to Legal Aid for further discussion.
Because the Supreme Court decision was narrow and focused on the President’s authority to cancel debt in response to a national emergency, President Biden announced that he was going to try to pursue other ways to create a different cancellation program. We do not have any details on what a new cancellation plan will look like or when it will be available. We will provide updates as they are available.
Borrowers with federal student loans that have been in the COVID-19 payment pause will need to make payments again starting in October 2023 (loan interest accrual resumed on September 1, 2023 and payments will be due beginning in October 2023). Borrowers should consider applying for an income-driven repayment plan to help make payments more affordable. For some borrowers these payments are as low as $0 a month.
For more information, see this post on our website: What should I know about federal student loans and income-driven repayment plans?
For step-by-step directions, see this post on our website: How to enroll your federal student loans into an income-driven repayment plan.
There are also other rare circumstances where the government may discharge or forgive your debt, including if you are totally and permanently disabled. For more information visit this post on our website: “Self-Help for Student Loan Borrowers: What to Do in Common Student Loan Scenarios”
Borrowers can learn about how to prepare for the start of repayment by reviewing this checklist on the Federal Student Aid website: Repayment Checklist for Borrowers (ed.gov).
Borrowers can also learn about a new, affordable repayment plan (the “SAVE” Plan) by reviewing this factsheet on the Federal Student Aid website: SAVE Plan Fact Sheet (ed.gov).
Resources for additional information:
- Federal Student Aid website: Home | Federal Student Aid
- Student Borrower Protection Center: Home - Student Borrower Protection Center
- National Consumer Law Center: Student Loans - NCLC
- For more information about how to consolidate your loans visit the Student Loan Borrower Assistance website.
- Read more about how to avoid scams on the Federal Trade Commission's website.
Updated September 12, 2023