How to Still Get Student Loan Forgiveness Despite Supreme Court Ruling

The Supreme Court has dashed the hopes of millions of Americans who were expecting some relief on their student loans, striking down President Joe Biden's plan to forgive tens of thousands of dollars for borrowers.

On Friday, the justices ruled 6-3 that Biden had overstepped his executive authority by deciding to eliminate up to $10,000 in federal student loan debt for borrowers making less than $125,000 ($250,000 for couples filing jointly) and up to $20,000 for Pell Grant recipients.

It's been reported that Biden's Department of Education (DOE) plans to find "workarounds" to allow the president to deliver on his campaign promise on student loan forgiveness. But so far nothing has been announced by the White House.

Progressives have also urged Biden to use the Higher Education Act of 1965—rather than the Higher Education Relief Opportunities for Students (HEROES) Act that he's drawn on for his plan—to forgive $10,000 in loans for borrowers. Proponents say the earlier law could allow him to waive federal student loans without an emergency or crisis situation, like the COVID-19 pandemic, which is required by the 2003 law.

In a statement responding to Friday's decision, the White House said it was "prepared" for the Supreme Court to strike down its program and signaled that there will be new executive action on student debt.

"The president will have more to say today. The president will make clear he's not done fighting yet and will announce next steps to protect student loan borrowers," a White House source told Newsweek.

Read more: Student Loan Forgiveness Updates and FAQs: Who Qualifies and How To Apply

Although the Supreme Court's ruling means that the loan balances of an estimated 40 million Americans will remain intact for now, borrowers can seek relief on their federal student loans in several other ways:

Public Sector Employees

Those working in public sector jobs can apply for Biden's Public Service Loan Forgiveness program, which cuts payments and erases the remaining balance after 120 qualifying payments for anyone working full time at a nonprofit or for federal, state, local or tribal governments.

Students Who Attended Misleading Colleges

Borrowers who attended predatory colleges that misled them about their job opportunities after graduation or colleges that suddenly closed can have their debts forgiven under new regulations that the DOE finalized last October as part of its efforts to expand eligibility for exiting loan forgiveness programs.

Income-Driven Repayment Plan

Biden's new income-driven repayment plan is another way borrowers can seek relief. Under the IDR plan, monthly payments on undergraduate loans would go from 10 to 5 percent of discretionary income. The plan also raises the amount of income considered nondiscretionary (or protected from being factored into repayments) and forgives loan balances after 10 years of payments, instead of 20, for those whose original balance was $12,000 or less.

Borrowers Who Defaulted

The Fresh Start program allows borrowers who defaulted on their student loans before the pandemic to wipe their slates clean by removing penalties on credit reports and making the rehabilitation process more accessible and cheaper for borrowers who choose to resume repayment.

The program, which is estimated to help approximately 7.5 million Americans, grants these individuals access to federal student aid and other government loans, to flexible repayment plans, and to short-term relief like forbearance, since those who have defaulted can suffer seizure of tax refunds and see long-lasting negative effects on their credit.

Students Still in College

Current students can receive cash grants through the Higher Education Emergency Relief Fund, which was launched during the pandemic and has provided financial aid to more than 18 million Americans since the start of 2021.

Update 6/30/23, 12:49 p.m. ET: This story was updated with a comment from the White House.