On June 30, 2023, the Supreme Court ruled 6 to 3 against the Biden-Harris Administration’s student debt relief program. Biden’s one-time federal student loan debt relief would’ve given eligible borrowers a full or partial discharge of federal student loans up to $20,000.
The June 30th Supreme Court decision was related to the Higher Education Relief Opportunities for Students Act of 2003, or “HEROES Act”, which President Biden invoked in August 2022 to launch his administration’s debt relief program.
By contrast, the PSLF program was established under the College Cost Reduction and Access Act of 2007. It is an entirely different program that allows government and non-profit employees to have their remaining loan balances forgiven after 120 qualifying monthly payments while working full-time for a qualifying employer.
The Federal Student Aid’s website, studentaid.gov, updated its homepage with a brief announcement:
“The Supreme Court has issued a ruling on whether we can move forward with our student debt relief program. We are reviewing the Court’s decision to determine next steps…. We will post more information as soon as updates are available.”
The Supreme Court’s decision effectively starts the countdown to the end of the federal student loan payment pause. Payments and interest were already set to resume 60 days after the Supreme Court issued its ruling on Biden’s Student Debt Relief plan, or 60 days after June 30. Student loan interest will begin accruing September 1, and payments will restart October 1.
The administration is pursuing a “Plan B” and has initiated the rulemaking process under the Higher Education Act. For more information on other actions the Biden administration and Department of Education are pursuing, click here. To learn more about the existing IDR Account Adjustment, click here.
The Income-Driven Repayment (IDR) Account Adjustment, announced in April 2022, offers a one-time revision of IDR payment counts for eligible borrowers. The initiative includes:
The IDR account adjustment applies to all borrowers with federal student loans, including individuals in both public-service and private-sector jobs.
This includes borrowers:
Borrowers must be in the proper programs by the year’s end (2023) to benefit from this initiative.
Due to the economic challenges created by the COVID-19 pandemic, the Biden-Harris Administration has extended the student loan repayment pause a number of times. Because of this, no one with a federally held loan has had to pay a single dollar in loan payments since President Biden took office.
On June 3, President Biden signed the Fiscal Responsibility Act of 2023, more commonly known as the debt ceiling bill, into law. As part of the negotiations, Biden agreed to put an end to the moratorium on federal student loan repayment. The pause may not be extended without Congressional approval.
Income-based repayment plans have long existed within the U.S. Department of Education. However, the Biden-Harris Administration is proposing a rule to create a new income-driven repayment plan that will substantially reduce future monthly payments for lower- and middle-income borrowers.
The rule would:
The Biden-Harris Administration is working to quickly implement improvements to student loans. Check back to this page for updates on progress. If you’d like to be the first to know, sign up for email updates from the U.S. Department of Education.
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