The Supreme Court decision that blocked the student loan forgiveness plan was a stinging defeat for President Biden’s administration. The program was aimed at delivering relief to millions of student loan borrowers struggling with debt, who have since then been required to start repaying their loans.

In August 2022, President Joe Biden announced his plan to cancel up to $10,000 in student loan debt for borrowers earning under $125,000 per year and up to $20,000 for Pell Grant recipients. The announcement was set to affect millions of borrowers struggling with student loan debt.

Over 26 million people from 50 states applied for debt relief, and over 16 million applications were approved. Soon after the announcement, six states filed a lawsuit against Biden to stop this debt cancellation plan on the grounds that Biden exceeded his authority. Ultimately, the Supreme Court stepped in to hear the case.   

June 2023 Supreme Court Verdict on Student Loan Debt Relief

On June 30th, 2023, the Supreme Court blocked the groundbreaking student debt relief plan to forgive all or some of the student loan debt affecting millions of Americans. The court ruled that the Department of Education is not authorized under federal law to provide such debt forgiveness.

Key Takeaways from the Verdict

Here are the key takeaways from this verdict and how it may affect you:

  • Federal student loan recipients who were eligible to get debt relief under this plan may need to seek other options due to this verdict.
  • Loan repayments resumed in October 2023, affecting borrowers in 50 states. Interest started accruing in September 2023.
  • Student loan repayments that had been on hold for over three years since the start of the pandemic resumed in the fall of 2023.

Student Loans That Have Already Been Cancelled

The Biden-Harris Administration has already relieved $146 billion in student loans for over 4 million borrowers through various efforts:

  • $62.5 billion in loan forgiveness through fixes to the Public Service Loan Forgiveness program.
  • $46 billion in student loan forgiveness through fixes to the income-driven repayment plans.
  • $22.5 billion in forgiveness for students who attended defunct or predatory schools. 
  • $12 billion in forgiveness for borrowers with disabilities. 

New Student Loan Debt Relief Measures 

The Biden-Harris Administration announced an additional $7.4 billion in student loan debt relief on April 12, 2024. 

Debt relief under this latest announcement is available in these categories:

  • $3.6 billion in debt relief through Saving on a Valuable Education (SAVE) Plan.
  • $3.5 billion in debt forgiveness through administrative adjustments to the income-driven repayment plans.
  • $300 million in debt forgiveness through changes to the Public Service Loan Forgiveness (PSLF) program.

Who Can Qualify for the New Student Loan Debt Relief Measures?

You can get your student loan debt erased if you fall into any of these categories:

  • You can get automatic relief of up to $20,000 if you owe more than you borrowed due to interest accrual. 
  • You can have the full amount forgiven if your balance grew after entering an income-driven repayment (IDR) plan and if your annual income is $120,000 or below (single) or $240,000 or below (married filing jointly).
  • You can get debt relief if you have outstanding undergraduate debt (if you entered repayment 20 years ago) or graduate school debt (if you entered repayment 25 years ago).
  • You can get an automatic loan discharge if you are eligible for loan forgiveness under PSLF, closed school discharge, or SAVE. 

Consider Other Debt Forgiveness Options

Check to see if you are eligible for debt forgiveness options, such as the Public Service Loan Forgiveness program. If you work for certain nonprofits or the government, you may be able to get your debt canceled.

You may also be able to get up to 85% of your debt canceled through the Nurse Corps Loan Repayment Program if eligible. There’s no single unified database of all existing debt relief options available today. You’ll have to put in some time to research and explore all your options to see if you qualify for any other student loan relief program.

Check To See if You Qualify for Student Loan Debt Relief Under New Plan

Although the student loan debt relief Supreme Court ruling was not what students were hoping for, not all is lost. The administration has announced and is still working on alternatives that may help millions of student loan borrowers sometime in the future.

Keep updated with the latest announcements from the U.S. Department of Education and check to see if you qualify for debt forgiveness under the Administration’s latest plans.

If you’re finding it challenging to make student loan payments due to other unsecured debts, consider paying off these debts so you’ll have more money available to pay your loans. TurboDebt can help you find the right debt relief option for your needs. Our team will offer you a personalized debt relief option based on your individual needs. Get in touch with us for a free consultation today.