When Is the Student Loan Forgiveness Deadline?

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When Is the Student Loan Forgiveness Deadline

With student debt relief constantly in the news, it can be hard to keep up with the latest updates. Although the deadline to apply for President Joe Biden’s debt relief plan was supposed to be Dec. 31, the Supreme Court’s decision on the matter means that date is scrapped. Instead, borrowers are more focused on October, when they’ll have to start making monthly payments on their loans again after a three-year pause.

Understanding the Biden administration’s student loan debt relief plan

The Biden administration hoped to grant up to $20,000 in student debt relief to some borrowers and up to $10,000 for millions more. The plan would have impacted as many as 43 million Americans, but the Supreme Court struck it down.

The Supreme Court’s final decision

The Supreme Court ruled in a 6-3 decision that the Secretary of Education did not have the authority to grant student debt relief through Biden’s plan. The plan was contingent on the interpretation of a 2003 law that gives the Department of Education the ability to relieve debt in crises, but the Supreme Court decided it did not apply in the way the Biden administration hoped to use it. 

What is next for student loan borrowers?

The Biden administration has moved forward with a different way of relieving some of the pain for borrowers.

The Department of Education is in the midst of public hearings to try again with its student loan relief plan, moving forward by applying the Higher Education Act. The previous plan relied on the 2003 Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which the Supreme Court felt didn’t give the education secretary enough power to grant the debt relief the administration hoped for.

Another way the administration is saving millions of people money is by correcting lenders’ mistakes. More than 800,000 people will have $39 billion in student loans wiped out. Some borrowers may pay as little as $0 per month. Others will have to shell out cash starting in October, after a break in payments following the pandemic. 

While waiting for the Department of Education’s next steps, you may prepare yourself to start paying for your student loans once they come due.

Consider the following options for student loan repayment

The Biden administration’s new plans aren’t the only way to save on student loans. Some people may still have a portion of their loans forgiven. Below are other options to help you lower student loan payments.

1. Public service loan forgiveness (PSLF) 

Public service loan forgiveness kicks in for anyone working in certain careers that serve a public need, such as government workers and certain nurses. Those who qualify will have their student debt forgiven after they make 120 qualifying monthly payments. 

2. Income-driven repayment forgiveness

Income-driven repayment plans mean your monthly payment is based on your income levels. The federal government has four options for that type of loan:

  • Revised Pay As You Earn Repayment Plan (REPAYE Plan)
  • Pay As You Earn Repayment Plan (PAYE Plan)
  • Income-Based Repayment Plan (IBR Plan)
  • Income-Contingent Repayment Plan (ICR Plan)

Depending on which you pick, the amount you have to pay each month may be based on a formula that’s based between 10% and 20% of your discretionary income. Discretionary income is typically viewed as the money you have left after paying for necessities like bills and taxes, but the federal government has a specific formula it uses to calculate each person’s discretionary income.

After the Supreme Court halted Biden’s loan forgiveness plan, the administration announced a different way to save borrowers money. Borrowers will save thousands of dollars thanks to corrections to mistakes made by lenders that didn’t keep proper track of payments, letting interest accrue. In total, that will erase $39 billion in debt for over 800,000 total Americans.

3. Loan forgiveness for teachers and nurses

Teachers and nurses have special loan forgiveness programs available to them because their jobs serve the public good. Nurses who enlist in the U.S. Army Reserve can have up to $250,000 of student loans forgiven; nurses from disadvantaged households have specific debt relief programs available to them; teachers who spend five years or more at certain schools can have up to $17,500 in student debt forgiven. Make sure to explore the many options available. 

4. Consolidate loans

Consolidating your loans means combining them so you pay on one total loan, rather than several separate ones. Consolidating can make your payments easier to keep track of. In some cases, the interest rate on a consolidated loan may be cheaper than what you were paying on other borrowed money.

5. Refinance loans

Just as some people choose to refinance their mortgages, you have an option to refinance student loans. Doing so can result in a smaller interest rate. That means you can continue paying the same amount and wind up paying less in the long run, or you can lower your monthly payment. 

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Pay less, learn more

The federal government offers plenty of ways to reduce the amount you’ll have to pay back for your student loans. Your career, school, and economic status will all play a role in this. Make sure to research thoroughly so you know what options are available to you.


Will student loan forgiveness affect your credit score?

Yes, paying off your student loans or having them forgiven may result in a slight ding in your credit report. Lenders like to see a variety of types of credit, so getting rid of one may have a negative impact, albeit small

Can you apply for student loan forgiveness while still in school?

Depending on the type of loan forgiveness you’re seeking, you may still be eligible for relief even if you’re still in school or never graduated.

What happens if you’re on an income-driven repayment plan and your loans are forgiven?

Your relief is capped at the amount of your outstanding debt. After the loan is paid off or forgiven, you don’t have to worry about monthly payments.

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