Student loan forgiveness has been an ongoing topic during election cycles and Supreme Court rulings as well as over social media platforms and late-night conversations between partners. While some call for sweeping student loan forgiveness policies, others argue that borrowers must pay what they borrowed, just like any other form of debt.
The state of student loan forgiveness has been in flux the past few months. Read on to learn more about anticipated changes and what has stayed the same.
Student Loan Forgiveness History
In 2007, President George W. Bush signed the College Cost Reduction and Access Act, which was the federal law that first introduced the concept of student loan forgiveness. With this law, graduates that worked in the public service sphere that made consistent monthly payments to their student loans would have their debt forgiven after 10 years.
Since its enactment, the Public Service Loan Forgiveness (PSLF) has been the only form of loan forgiveness available. However, in 2022, President Joe Biden announced sweeping student loan forgiveness changes. They included:
- Up to $20,000 in student loan debt relief for Pell Grant recipients whose annual income is less than $125,000 ($250,000 for married couples).
- Change the existing structures to allow for more borrowers to qualify for student loan forgiveness.
Shortly after the administration began accepting applications for student loan debt relief, several states and interest groups filed lawsuits, claiming the forgiveness policies were unlawful. Furthermore, in June of this year, the Supreme Court blocked the administration’s plan, stating that Congress should be the body to authorize student loan forgiveness and not the President.
As of now, no applications for student loan forgiveness under President Biden’s proposal are being accepted, and everyone that did apply for debt relief has been denied their request.
In 2020, borrowers did not have to make payments to their federal student loans, nor have their loans been accruing interest, a measure enacted by President Donald Trump during the Coronavirus pandemic. Beginning in September 2023, student loans began accruing interest once more and borrowers were required to begin making monthly payments.
Current State of Student Loan Forgiveness
On July 1, 2026 new Public Service Loan Forgiveness (PSLF) rules will change which employers qualify. An employer is eligible for PSLF when Employment Certification Forms (ECFs) are submitted and verified. Under the new rules, the Department of Education will have the authority to disqualify certain organizations from PSLF eligibility. They have stated they will “ensure the definition of ‘public service’ excludes organizations that engage in activities that have a substantial illegal purpose.” Learn more: Qualifying Employment.
- Be employed by a U.S. federal, state, local, or tribal government or a qualifying not-for-profit organization.
- Work full-time for that agency or organization.
- Have Direct Loans – or consolidate federal loans into a Direct Consolidation Loan.
- Repay loans under the Income-Driven or Standard Repayment plans.
- Make a total of 120 qualifying monthly loan payments.
Learn more about Public Service Loan Forgiveness (PSLF).
