Are Student Loans Being Forgiven or Not?

The House and Senate voted to repeal President Biden’s student loan forgiveness plan, but does it even matter?

graduation cap icon for student loan story
(Image credit: Getty Images)

House Republicans voted to repeal President Biden’s student loan forgiveness plan and the administration's efforts to extend the student loan payments pause, but that extension won't happen anyway. President Biden agreed to resume student loan payments as part of the debt ceiling deal, which suspends the national debt limit until 2025. 

"No one got everything they wanted, but the American people got what they needed. We averted an economic crisis, an economic collapse," President Biden said in a speech regarding the debt limit agreement.

The U.S. Supreme Court struck down Biden's student loan forgiveness plan anyway. So, Biden's plan for widespread student loan relief won't happen.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

What does this mean for you? Have a plan to resume your student loan payments.

What is the Status of Student Loan Forgiveness?

Repealing Biden's student loan forgiveness passed the House and Senate. The vote was largely symbolic because of the power split in Congress.

Republicans, who hold the House majority, largely oppose Biden’s plan, and some moderate Democrats also disapprove of the student loan debt relief plan. For example, U.S. Sen. Joe Manchin (D-WV), a moderate Democrat, voted to repeal Biden's student loan forgiveness plan.

When will the Supreme Court rule on student loan forgiveness? The Supreme Court ruled on June 30. Biden's student loan forgiveness plan will not move forward now that the Supreme Court has ruled against it.

As of now, it doesn’t appear that President Biden has a backup plan for broad-scale student loan forgiveness. However, the Biden administration has taken other measures to help borrowers with student loan forgiveness, through programs like borrower defense loan discharge.

Will Student Loan Payments Resume?

You don’t need to make payments on your federal student loans yet because the pause on federal student loan payments is still in place. But student loan payments are set to resume in October. Originally, federal student loan payments were expected to resume in August.

Is Student Loan Forgiveness Still Happening? 

Biden's original plan for student loan forgiveness won't happen, but borrowers may still have a portion of their federal student loans forgiven. For example, an income-driven repayment plan allows you to make student loan payments based on your income and family size. Additionally, the Biden administration has recently changed various rules governing income-driven repayment so that more borrowers might benefit from the program.

  • Under the income-driven plans, you would make student loan payments for 20-25 years, depending on the type of plan you enroll in. 
  • Your student loan balance at the end of the 20-25 year term would be forgiven, regardless of the amount you still owe.

How to Pay for Student Loans

Borrowers have other student loan repayment plans to choose from if they don’t qualify for an income-driven repayment plan. How long it takes to pay off student loans depends on the type of plan in which you enroll. Some plans are designed so you’ll pay less interest, which saves you money in the long run. Other repayment plans are designed to make the repayments less of a burden while you are making monthly payments.

  • Standard Repayment plan: You will make fixed payments for up to 10 years and will accrue less interest.
  • Graduated Repayment plan: Your student loan payments will start low and will gradually increase as you begin to make more money.
  • Extended Repayment Plan: You will make student loan payments for up to 25 years. Unlike the income-driven plans, your balance will need to be fully repaid at the end of the 25-year term. (subject to eligibility requirements)

Having a plan in place to repay your student loans before payments resume is a good thing to focus on if you have a federal student loan. Although Biden’s plan for student loan forgiveness has been struck down, having a strategy to make your monthly payment again and/or finding a federal student loan repayment program that works for you might help make monthly payments more manageable.

Katelyn Washington
Tax Writer

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.