Student loan relief: What borrowers can still rely on despite legal hurdles in 2024

Student loan debt has become a pressing issue for millions of Americans, with the total outstanding balance reaching a staggering $1.6 trillion. As the Biden administration continues to push for widespread student loan forgiveness, legal challenges have created uncertainty for borrowers. However, despite these obstacles, there are still several relief options available to those burdened by student loan debt. This article will explore the current landscape of student loan relief and what borrowers can count on in 2024.

The Saving on a Valuable Education (SAVE) plan, introduced by the Biden administration in 2023, remains one of the most promising avenues for student loan relief. Despite recent legal challenges, much of the SAVE plan is still in effect, offering significant benefits to borrowers.

Key Features of the SAVE Plan:

Lower monthly payments: The SAVE plan reduces monthly bills to 5% of discretionary income for undergraduate loans, compared to 10% or more under other income-driven repayment (IDR) plans.

Interest subsidy: The government covers any unpaid interest each month for SAVE enrollees, preventing balances from growing.

Faster loan forgiveness: Some borrowers may be eligible for loan forgiveness after just 10 years, compared to the typical 20-25 years under other IDR plans.

U.S. Department of Education Secretary Miguel Cardona emphasized the ongoing benefits of the SAVE plan, stating, "Borrowers enrolled in the SAVE plan can still access its considerable benefits, including undergraduate loan payments cut in half, as well as protection against interest accruing if borrowers are making their monthly payments".

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness program continues to be a viable option for those working in government or non-profit sectors. Despite past challenges, the Biden administration has made efforts to expand eligibility and streamline the application process.

PSLF Benefits:

• Loan forgiveness after 10 years of qualifying payments
• Expanded eligibility criteria
• Opportunity to reapply for those previously denied
• Over 876,000 public servants have had their debt erased through PSLF, totaling more than $62 billion in relief.

Income-Driven Repayment Plans

While the SAVE plan is the newest and most generous IDR option, other income-driven repayment plans remain available to borrowers. These plans can significantly reduce monthly payments and potentially lead to loan forgiveness after 20-25 years of repayment.

Available IDR Plans:

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

Mark Kantrowitz, a higher education expert, notes that "Most individuals with federal student loans are eligible for income-driven repayment plans".

Borrower Defense to Repayment

For those who attended schools that engaged in misconduct or closed unexpectedly, the Borrower Defense to Repayment program offers a path to loan discharge. The Biden administration has streamlined this process, processing applications collectively rather than individually.

Borrower Defense Highlights:

• Approximately 1.6 million borrowers have received debt discharge
• Over $28 billion in relief distributed
• Eligibility for full discharge of Direct Loans, FFEL Program loans, or Federal Perkins Loans

Total and Permanent Disability Discharge

Borrowers with severe, permanent disabilities may be eligible for loan discharge through the Total and Permanent Disability (TPD) program. The Biden administration has improved collaboration with the Social Security Administration to identify eligible borrowers more efficiently.

TPD Discharge Stats:

• Over 548,000 disabled borrowers have received forgiveness
• $14.1 billion in aid provided
• Improved identification of eligible borrowers through interagency cooperation

Looking Ahead: Potential for Broader Forgiveness

While the Biden administration's initial attempt at wide-scale forgiveness was struck down by the Supreme Court, efforts to provide broader relief continue. The Department of Education is working on a revised plan that could benefit tens of millions of Americans.

Aissa Canchola-Bañez, policy director at the Student Borrower Protection Center, emphasizes the importance of ongoing relief efforts: "Borrowers shouldn't be expected to live court judgment by court judgment. They deserve relief and this is why it's critical for the administration to finalize its debt relief rules and enact debt relief for as many borrowers as possible".

However, it's important to note that any new forgiveness plan is likely to face legal challenges. Mark Kantrowitz predicts, "Lawsuits are expected to follow swiftly". The recent Supreme Court ruling overturning the Chevron doctrine may also make it more difficult for Biden's revised plan to withstand legal scrutiny.

While the landscape of student loan relief remains complex and subject to legal challenges, borrowers still have access to several valuable options in 2024. The SAVE plan, Public Service Loan Forgiveness, income-driven repayment plans, and other targeted relief programs continue to offer hope for those struggling with student debt.

As the Biden administration works to finalize new debt relief rules, borrowers should stay informed about their options and take advantage of the programs currently available. By understanding and utilizing these relief opportunities, many can find a path toward more manageable student loan repayment and potential forgiveness.