Student Loans Relief Explainer (2023 Edition)
A lot has happened—and some things haven’t happened—since we published our 2022 student debt relief explainer. The Department of Education has a page summarizing the current state of things; here, we’ll lay out the options available to you and what’s still coming.
Some of the relief so far has been in the form of automatic forgiveness—i.e., you’d know whether you’ve received it or not. But you must apply for other relief programs, and you should look into these even if you’ve done so before, as eligibility requirements may have changed.
The short version: What to do, and when to do it by
Log into StudentAid.gov now to make sure your contact info is up-to-date.
Subscribe to updates on the Department of Education website to know when more loan relief is coming!
See if you qualify for Public Service Loan Forgiveness.
Check out the new SAVE repayment plan.
Also look at the “on-ramp” program. This program delays your payments by 12 months.
Resume making your student loan payments. If you haven’t already signed up for the on-ramp, you owe at least one payment as of this month.
Watch for future Department of Education actions.
What relief has the Biden Administration provided?
The Biden Administration has been reducing excessive student debt on multiple fronts.
Past actions include:
A period of expanded eligibility for Public Service Loan Forgiveness, including the ability to count the same periods of work for both Teacher Loan Forgiveness and Public Service Loan Forgiveness (ordinarily, each period of work can only be counted toward one or the other)
A succession of “borrower defense” discharges that wiped out loans to borrowers who attended various for-profit colleges
A new income-driven repayment plan that won’t allow principal to increase as long as you make payments
Cancellation of loans for the costs of attending a fraudulent school (“borrower defense”)
Automatic forgiveness whenever possible through administrative fixes, such as this batch from last year and this batch from this month
The Biden Administration also tried to issue $10,000 per person ($20,000 for some borrowers) in one-time relief to millions of borrowers, but the Supreme Court kiboshed that.
What relief is the Biden Administration currently providing?
Public Service Loan Forgiveness
If you have worked in federal, state, local, tribal government or a non-profit organization for 10 years or more (even if not consecutively) you may be eligible to have all your debt canceled. Apply and learn more here.
Teacher Loan Forgiveness
You may be eligible for up to $17,500 of forgiveness on direct subsidized and unsubsidized loans, and subsidized and unsubsidized Federal Stafford loans, as well as Consolidation loans.
To apply for Teacher Loan Forgiveness, submit this form from the studentaid.gov website to your loan servicer. For more information, see the website.
If you have Perkins loans, you may also be eligible for Perkins Loan Teacher Cancellation.
You may also be eligible for Perkins loan cancellation as an early childhood education provider, veteran, nurse or other public servant.
Application for cancellation or discharge of a Perkins Loan must be made to the school that made the loan or to the school’s Perkins Loan servicer. The school or its servicer can provide forms and instructions specific to your type of cancellation or discharge.
The SAVE income-based repayment plan
There are several income-based repayment plans (also known as income-driven repayment or IDR plans). The Biden administration has created a new one, called Saving on A Valuable Education or SAVE, that can substantially reduce future monthly payments for lower- and middle-income borrowers.
(Another repayment plan was called REPAYE. If you’re on that plan, you’ve automatically been migrated to SAVE.)
SAVE is already benefiting borrowers today:
SAVE increased the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
SAVE covers the borrower's unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower's loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
And SAVE will have more features starting next year:
SAVE requires borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from 10% today.
Some borrowers will have balances forgiven as soon as after 10 years of payments, up to 20 years, based on the amount borrowed.
Certain deferments and forbearances will give credit toward forgiveness.
Learn more on the SAVE repayment plan webpage.
Borrower Defense
Apply for Borrower Defense if you believe your school misled you.
Pursuant to the Sweet vs. Cardona settlement, you may be eligible for automatic complete discharge of your loans and refund of your previous payments if you went to certain schools.
More information:
Settlement information from the Project on Predatory Student Lending.
Settlement information from the Department of Education.
More relief in the future through negotiated rulemaking
It’s too early to say what relief or how much this will end up providing, but early appearances are that the Biden Administration is pursuing a longer route to providing automatic forgiveness, through a process called “negotiated rulemaking”. Most of what we know comes from the Department’s press release; we’ll know more once the discussions conclude and the Department publishes a Notice of Proposed Rulemaking laying out whatever they’ve agreed on.
Keep yourself apprised
Subscribe to Federal Student Loan Borrower Updates to find out when the Department announces further relief.