Biden Student Loan Forgiveness - October 2024

• Most student loan forgiveness programs are on hold due to ongoing litigation or administrative delays.

• The presidential election also complicates things and may lead to even more changes depending on the outcome.

• You can take small, manageable actions now, like certifying your employment or exploring an income-driven repayment plan, to stay on top of your loans.

It’s exhausting, right? One minute, it seems like student debt relief is finally here. The next, it’s blocked, shifted, or delayed all over again. If you’re feeling frustrated, tired, or just over it, you’re definitely not alone.

Right now, President Joe Biden’s latest debt relief plan was moving ahead—until it got held up in federal courts again, this time in Missouri. Everything is on pause, and once again, we’re left wondering when this rollercoaster will finally stop.

We know how tough this uncertainty can be. For many borrowers, it’s not just about the financial weight—it’s about the constant stress of wondering what’s next.

Let’s break down exactly what’s happening now, so you can understand what it means for you and what steps you can take.

Related

• Did Student Loan Forgiveness Pass? Latest 2024 Updates

• Can I Still Apply for Student Loan Forgiveness? Yes, Here’s How

• How to Apply For Student Loan Forgiveness (2024)

Borrowers have been through a whirlwind of announcements, pauses, and changes. Right now, several key programs that promised relief are either delayed or tied up in court.

Below is a refresher on each program, along with what’s happening now and specific actions you can take.

1. One-Time Account Adjustment (Most Impactful)

• Who It Helps: Borrowers on IDR plans or pursuing Public Service Loan Forgiveness (PSLF).

• What It Does: Provides borrowers with more credit toward forgiveness by counting past periods of repayment, deferment, and forbearance.

• What’s Happening: The U.S. Department of Education is adjusting borrower accounts, aiming to complete these adjustments by January 2025.

Actions You Can Take:

• Stay Informed: This process is automatic if your loans are with federal student aid. There’s no need to take action right now, but keep an eye on your loan status and your credit report.

• Reconsideration Requests: Once adjustments are complete, if you think some periods were missed, you can file a reconsideration request.

2. SAVE Plan Litigation

• Who It Helps: Borrowers looking for reduced monthly payments and accelerated forgiveness.

• What It Does: The Saving on a Valuable Education plan reduces monthly payments and offers faster forgiveness for lower-income borrowers.

• What’s Happening: The SAVE plan is paused pending an October 8 decision from the Supreme Court.

Actions You Can Take:

• Be Prepared: Payments are currently paused, but could resume. Be ready to handle potential federal student loan payments restarts with at least 60 days’ notice from the Biden administration.

• PSLF Considerations: If you’re pursuing PSLF, consider switching to an IBR plan to keep earning credit. Just remember this may mean higher payments and losing some benefits like interest subsidies.

3. PSLF and the SAVE Plan Intersect

• Who It Helps: Public service workers with eligible federal loans, aiming for forgiveness after ten years of qualifying payments.

• What It Does: PSLF forgives student loan debt for public service workers after ten years of payments.

• What’s Happening: SAVE plan litigation impacts PSLF credit accrual. Related: How Does the SAVE Plan Work with PSLF?

Actions You Can Take:

• Review Your Plan: If you’re pursuing PSLF and enrolled in the SAVE plan, consider switching to IBR if you want to keep earning credit during this pause.

• Assess Timing: If you’re close to forgiveness, switching plans might make sense. If not, you might be better off waiting to avoid higher payments.

4. “Plan B” Targeted Cancellation

• Who It Helps: Borrowers with significant interest accrual or long repayment periods not covered by prior relief efforts.

• What It Does: Aimed to provide targeted relief, but was blocked before implementation.

• What’s Happening: Plan B is on hold indefinitely due to litigation in the court of appeals.

Actions You Can Take: No action is needed at the moment. The litigation makes the future uncertain, but keeping up with updates will be helpful.

5. Borrower Defense & Sweet v. Cardona Settlement

• Who It Helps: Borrowers misled by for-profit colleges who applied for borrower defense or are covered by the Sweet settlement.

• What It Does: Discharges loans for borrowers defrauded by their schools. Related: How to Qualify for Borrower Defense to Repayment

• What’s Happening: Implementation is delayed, and new borrower defense rules are on hold pending legal challenges.

Actions You Can Take:

• Keep Records Organized: Make sure to have all documents related to your loans and application in one place. This may help resolve issues related to credit bureaus and credit score impacts if any disputes arise.

• Monitor Progress: The Department is behind on timelines but is working on compliance. Continue to monitor for updates or requests for additional information.

The future of student loan forgiveness remains uncertain, with several ongoing court cases likely to stretch on for months or even years. Borrowers, particularly those enrolled in the SAVE plan, should expect to remain in a holding pattern, with delays and pauses continuing.

While the SAVE plan protects borrowers from accruing interest during this period, it also means they’re left waiting, unsure when or if their loan balances will be forgiven.

The timeline for the one-time account adjustment is currently set for January 2025, though it may come sooner. Until then, student loan borrowers need to stay patient and wait for updates from the Department of Education.

For those who want to prepare financially, it might help to take specific steps:

• Set aside funds during the pause, especially in a high-yield savings account.

• Be ready for potential increases in interest rate or monthly payments if forgiveness programs are altered or blocked.

• This approach can provide a sense of control, even if the future is uncertain.

The upcoming elections add another layer of unpredictability. A change in Congress could mean new opportunities for forgiveness, or it could lead to rollbacks of current programs.

Some American borrowers are particularly vulnerable right now:

• Those enrolled in the SAVE plan, who may face sudden shifts in policy.

• Borrowers nearing PSLF forgiveness could see changes that affect their credit accrual or eligibility.

To stay prepared, borrowers should:

• Continue to certify employment.

• Keep their accounts updated.

• Monitor any changes that may affect their eligibility or forgiveness status.

Programs Ending in September

Two major programs ended in September that are related to student loan repayment: the Payment On-Ramp Program and the Fresh Start Program.

With the end of the On-Ramp period, borrowers who previously delayed payments without negative credit consequences now need to ensure they are in a sustainable repayment plan.

If you’re not currently in an income-driven repayment plan, contact your student loan servicer now to explore options like the SAVE plan or another IDR that might lower your payments. Taking action immediately is necessary to avoid falling behind or risking default.

The Fresh Start Program provided borrowers in default with an easy way to return to good standing. Now that it has ended, borrowers who remain in default are at risk of missed payments, wage garnishments, tax refund offsets, and Social Security benefit offsets.

It’s important to act quickly—explore options like student loan consolidation or rehabilitation to get out of default. Even though Fresh Start has ended, there are still pathways to avoid negative outcomes and regain control of your loans.

If you’re feeling overwhelmed, remember that you can always reach out to your servicer or consult a student loan professional. There is always a way to manage your loans, and taking small steps now can make a big difference in staying on track.

The news is filled with stories about different student loan debt relief opportunities. There’s so much happening all at once, and anxiety is so high for people desperate for help. Shady businesses are taking advantage of this situation by bombarding people with emails, hoping to scam them out of their hard-earned money.

Some companies might call or email you claiming they can help you get rid of your student loans for a fee. But you need not pay for help with your federal student loans. And the government or your loan servicer won’t call you to tell you that your loans have been forgiven.

Instead, you’ll get a letter or email confirming your balance has been forgiven and no student loan payments are due.

Emails from the department will come from:

• noreply@studentaid.gov

• noreply@debtrelief.studentaid.gov

• ed.gov@public.govdelivery.com

If someone tries to scam you, tell the Federal Trade Commission by calling 1-877-382-4357 or going to reportfraud.ftc.gov.

Save this page to your bookmarks for continuous updates. Although this specific method of student loan relief is on hold, you can still apply for forgiveness through other programs, as listed above.