Counting On Student Loan Forgiveness? 5 Steps To Take While You Wait

Counting On Student Loan Forgiveness? 5 Steps To Take While You Wait

After President Joe Biden’s student loan forgiveness plan in August 2022, millions of borrowers and their families rejoiced as they began counting down the days until they had up to $10,000 in student loans (or up to $20,000 in loans for Pell Grant recipients) wiped away but unfortunately, most of the news surrounding student loan forgiveness has been either confusing, depressing, or both ever since then.

Several legal challenges to the plan have even left forgiveness up in the air, at least until the U.S. Supreme Court makes the final decision on the legality of the plan come early 2023. And this means that most borrowers counting on forgiveness should have a contingency plan in place if it doesn’t go through. In other words, you should have a plan to begin making full payments next year if the ruling doesn’t go the way you hope.

It’s also worth noting that, even though the Biden administration claimed in August that the pause on federal student loan repayment would only be extended “one final time through December 31, 2022,” that has now been changed as well. The administration extended this pause once again into 2023.

At this point, the 0% interest freeze and payment pause on federal student loans will end 60 days after the administration is permitted to implement the debt relief program or the legal challenges are resolved. “If the debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that, writes the U.S. Department of Education.

Counting On Student Loan Forgiveness? 5 Steps To Take While You Wait
Counting On Student Loan Forgiveness? 5 Steps To Take While You Wait

What Steps To Take While You Wait For student loan forgiveness

Whether you think forgiveness will go through or not, there are some steps you can take to improve your situation and prepare for what happens next. Here are five steps to take while you wait for the Supreme Court to decide on the fate of your federal student loans.

Make Sure Your Contact Information Is Up To Date

First, you should log into your account at and your student loan servicer to ensure that your contact information is up to date. This step may seem insignificant, but the fact remains that many borrowers have not made a payment on their federal student loans for nearly three years at this point. During that time, it wouldn’t be uncommon to move from one place to another or change one’s phone number completely.

By logging in your account and updating your information, you’ll get a notification when federal student loan repayments will restart and avoid missing the communication.

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Review Your Current Loan Situation

Next, you’ll want to look over your federal student loan data to ensure all is correct and reported properly. You can look in your account to find out what your monthly payment(s) will be when they resume, which may be particularly important if the forgiveness plan never comes to fruition.

If you don’t like what your monthly payment will be when payments resume next year, you can also look into moving your loans to an income-driven repayment plan. With this type of repayment plan, you’ll pay a percentage of your “discretionary income” toward your student loans for 20 to 25 years before having remaining loan balances forgiven.

Confirm You’re Eligible For Forgiveness

In addition to making sure the student loans you have are eligible for federal student loan forgiveness, you’ll also want to make sure you meet other qualifications. For the most part, these include having an individual income that is less than $125,000, or $250,000 for married couples.

You can qualify with an income under this threshold during tax years 2020 or 2021, so it won’t hurt to get your tax returns out from those years to check.

Sign Up For DOE Updates

Whether you already applied for Biden’s student loan forgiveness plan or you want to apply once applications are being accepted again, you should make sure you’re positioned to hear the latest updates in real time.

Fortunately, the U.S. Department of Education published a link where you can sign up for the latest updates or subscribe to their emails.

Pay Down Other Debts

Finally, it’s important to remember that it’s up to you whether you make payments on your federal student loans right now. After all, the 0% fixed interest rate on federal loans means that now is a great way to make payments that apply directly to the principal of your loans.

However, my recommendation to most borrowers is to not make additional payments. Borrowers, should never give the government (i.e. their student loans) extra money that’s not required.

If you have other debts to pay off, such as credit card debt or car loan debt, you could always throw your extra cash toward paying down those balances while you wait. Doing so can help you save on interest while paying down those debts faster, both of which could make life easier once student loan payments resume.

The Bottom Line

Will Biden’s student loan plan ultimately go through? At this point, what happens next is anyone’s guess.

Unfortunately, borrowers will have to wait to see how the situation shakes out, and whether they will see $10,000 to $20,000 in federal student loans wiped off their balances sometime next year.

In the meantime, it makes sense for everyone who stands to benefit from this plan to take stock of where they’re at. This means updating contact information, checking on loan balances and payments, and looking into other repayment plans that can help them get a monthly student loan payment they can live with.

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