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In a Friday decision, the Supreme Court rejected President Joe Biden’s proposal to forgive student loans. As a result, millions of Americans, who once held hope for up to $20,000 in debt relief, will continue to struggle under the weight of student debt. For those who have enjoyed a payment pause since March 2020, interest on loans will start accumulating again on September 1, with payments restarting in October.
If you’re now rushing to organize your debt repayment strategy, here’s a breakdown of the Supreme Court’s decision and the potential alternatives for loan forgiveness that might still be available.
Determine the precise amount you’ll need to repay
Hopefully, today’s news didn’t come as a shock. However, the loss of forgiveness hopes has left millions in a difficult and stressful situation. The first step to regaining control is to determine the exact amount you owe, when payments resume, and where those payments should be directed.
As previously mentioned, repayments will restart in October. To locate your loan details and providers, visit studentaid.gov. (Note: This is not the same platform you might typically use for loan payments, such as through a servicer like Sallie Mae.) Once logged in, choose “My Aid” from the dropdown menu under your name. Your loan servicer(s) will be listed there. Clicking on “Loan Breakdown” will display all your loans, including those you’ve paid off or consolidated.
After identifying your loan servicer, visit their website and log in to ensure your contact details are current. This will help you avoid missing any important updates during this transition.
To summarize: Your current loan provider, not the government, will notify you about any remaining balances and adjusted monthly payment amounts.
Borrowers facing financial difficulties, such as unemployment or significant medical expenses, may be eligible for loan forbearance or deferment. If you’re unable to make your regular payments, contact your loan servicer immediately to discuss alternatives before missing any deadlines.
Explore Additional Loan Forgiveness Programs
Borrowers still have access to various loan forgiveness options, and you might qualify for programs you haven’t yet considered. FSA provides a guide here to help you determine eligibility for other government-backed forgiveness initiatives. If you discover a suitable program, take immediate steps to ensure you’re correctly enrolled.
For example, Public Service Loan Forgiveness (PSLF) eliminates remaining debt for a range of public service employees, while educators may qualify for Teacher Loan Forgiveness.
Beyond occupation-specific programs, all federal borrowers can pursue loan forgiveness through income-driven repayment (IDR) plans. Unlike traditional loans, IDR plans calculate payments based on income rather than the total loan amount. Earlier this year, the Education Department released details of its updated IDR plan, known as REPAYE. Here’s how much your payments could decrease under the new REPAYE plan, which is expected to launch by July 1, 2024, with some features rolling out earlier, as reported by CNBC. Once REPAYE is available, applications can be submitted at StudentAid.gov.
And if you’re (understandably!) tempted to ignore your loans altogether, here’s what could happen if you fail to repay your student debt.
