President Biden’s original student loan cancellation plan was struck down by the U.S. Supreme Court in June 2023. Read below for more information about what happened at the Supreme Court and President Biden’s new plan to provide debt relief. You can also use our website to help explore whether you are eligible for other cancellation programs that are still in place.
- What was President Biden’s original plan to cancel student loan debt?
- What did the Supreme Court decide?
- What now for student loan borrowers counting on debt relief?
- What is President Biden’s new plan for student loan relief?
- How do I share my thoughts about the new debt relief plan?
On June 30, 2023, the Supreme Court struck down President Biden’s plan to provide relief to millions of low-income Americans who are struggling with student loan debt.
After the Supreme Court struck down the student debt cancellation plan, President Biden announced he would pursue an alternative pathway to provide debt relief to borrowers.
What was President Biden’s original plan to cancel student loan debt?
On August 24, 2022, President Biden announced that the government would offer one-time federal student debt relief to borrowers who made less than $125,000, or $250,000 for spouses that file their taxes jointly. All eligible borrowers could receive up to $10,000 in cancellation, and borrowers who received Pell grants while in college could receive up to $20,000 in cancellation.
Lawsuits challenging President Biden’s debt relief plan put the program on hold. In February 2023, the U.S. Supreme Court heard two cases challenging the debt relief plan. NCLC advocates were with borrowers in the courtroom and on the steps of the Supreme Court during the arguments to defend student loan cancellation.
What did the Supreme Court decide?
On June 30, 2023, the Supreme Court issued decisions in the cases striking down President Biden’s student loan relief plan. By a 6-3 vote, the majority decided that the HEROES Act (a national emergency law) did not give the Department of Education authority to cancel a portion of student loan debt to help borrowers recover from the pandemic. The Court did not address whether any other laws give the President or the Department of Education authority to cancel student debt.
What now for student loan borrowers counting on debt relief?
Although the Supreme Court struck down President Biden’s plan, you may have other options to get debt relief. There are several programs to cancel some or all of your federal loans or have them forgiven, depending on your situation. You can see if you are eligible for other cancellation programs that are still in place.
After the Supreme Court struck down the student debt cancellation plan, President Biden announced he would pursue an alternative pathway to provide debt relief to borrowers.
What is President Biden’s new plan for student loan relief?
The Supreme Court’s opinion on debt relief is limited. The Supreme Court only said that the Department of Education is limited to what it can do for borrowers using national emergency authority under the HEROES Act. Its opinion does not prevent the Biden Administration from pursuing debt relief using other legal authority.
After the Supreme Court issued its decision, President Biden announced that he would pursue a new plan for relief for borrowers using the Higher Education Act, the federal law that governs the federal student loan programs. However, the new plan will be different from the old plan that was blocked by the Supreme Court.
The Department of Education began the process of developing regulations for this new student debt relief plan in 2023. In April 2024, the Department published proposed regulations that would provide relief to the following categories of federal student loan borrowers:
- Borrowers who have had their balances balloon with interest and now owe more than they did when they began repayment,
- Borrowers who have been trapped in debt for two decades or more,
- Borrowers have missed out on debt cancellation programs that they are eligible for, and
- Borrowers who took out debt for certain low-value or closed programs.
Under the proposed regulations, millions of borrowers who owe more now than they originally borrowed would have some or all of the amount their balance has grown due to interest canceled. These borrowers would not have their full debt canceled, but their debt would be reduced. Other borrowers, including those who entered repayment on or before July 1, 2005 (or July 1, 2000 for those who borrowed for graduate school) and those eligible for existing loan cancellation programs but who have been blocked by red tape, would have their debts fully canceled.
The Department of Education has also said that it plans to propose another regulation to provide relief to borrowers experiencing financial hardship that prevents them from being able to fully pay back their loans. As of April 24, 2024, that proposal has not yet been published.
Borrowers should be aware that these are just proposed regulations and there is no guarantee that they will get the relief proposed. There are still a lot of steps between a proposal and a final, implemented policy. And, as with the prior debt relief plan, there may be efforts by politicians and interest groups to block the plan to prevent borrowers from getting relief.
How do I share my thoughts about the new debt relief plan?
Anyone may submit comments on the proposed student debt relief plans that were released in April 2024 by May 17, 2024. Borrowers and those who work with borrowers may wish to submit comments in support of the proposal. You can also share your thoughts on the new plan with us on our Share Your Story page. NCLC may include what we hear from borrowers in our comments to the Department of Education.
