A Guide to The Biden-Harris Student Debt Relief Plan

By Corey Buhay | Published on February 23, 2026

)

Between 2023 and 2024, the Biden-Harris administration successfully initiated a number of sweeping new programs for federal student debt relief. To date, nearly 4.75 million student borrowers have qualified for partial loan cancellation under the new programs, and more than $167 billion in debt has been forgiven.

But the reforms don’t stop there. In May of 2023, President Biden approved another $7.7 billion in debt relief for thousands of borrowers. An estimated one in ten borrowers will now qualify for forgiveness under the new plans. But which borrowers qualify? And how are these plans different from the one that got struck down by the Supreme Court in 2023? Here’s what you need to know.

What is the Biden-Harris student debt relief plan?

On Aug. 24, 2022, the Biden Administration announced a federal student debt relief plan that would have granted up to $10,000 in debt cancellation to everyone with outstanding loans from the U.S. Department of Education. Pell Grant recipients could qualify for even more — up to $20,000 in federal debt cancellation. This original plan would have affected about 43 million Americans.

In July of 2023, the Supreme Court struck down the plan on a legal technicality, and it was never implemented. But the Biden-Harris Administration went on to announce several new measures under a separate piece of legislation called the Higher Education Act. Several of these have already gone into effect.

So far, the Administration’s new proposed debt-relief measures include:

• The SAVE Plan, a new, more affordable income-driven repayment plan that reduces monthly payments to just 5% of adjustable gross income (AGI) for most borrowers. (Note that the SAVE Plan is currently being challenged in court, and the outcome could impact the plan’s availability.)
• New rules that forgive or pause accrued interest for borrowers who are underwater on their student loans. In other words, if you now owe the government more money than what you originally borrowed, you could have a large chunk of the excess forgiven.
• Updates to the Public Service Loan Forgiveness (PSLF) program and Income-Driven Repayment (IDR) programs, which have resulted in partial loan forgiveness for many borrowers.
• Automatic loan forgiveness for many borrowers who have been in federal student loan repayment for 20 years or more.
• Loan forgiveness for students of for-profit universities or other schools that didn’t provide a valuable education.
• A 50% reduction in monthly payments for many current SAVE Plan enrollees. (These borrowers will also get a month-long administrative forbearance period starting July 1.)

Here’s what you need to know about your eligibility for relief, and what you should do next if you qualify.

The pandemic payment pause is over—but there’s a grace period

All federal borrowers qualified for a special type of student loan repayment relief until October 1, 2024. This is part of the student loan “on-ramp” — a kind of year-long grace period following the end of the pandemic payment pause.

As a refresher: In March 2020, Former President Donald Trump passed a student loan payment pause to provide pandemic relief for millions of borrowers. The pause was extended several times, and interest did not accrue during this universal forbearance period.

The payment pause officially ended in September 2023, and interest accrual resumed on October 1, 2023. However, the Department of Education initiated a year-long “on-ramp” period to ease the transition to resumed repayments. Between October 1, 2023 and October 1, 2024, borrowers weren’t penalized for missing payments. Interest will still accrue, but you can’t be reported for missing a payment, and your loans can’t go into delinquency or default. This year-long grace period gives folks a chance to get on their feet before they have to begin making payments again.

Low- and Middle-income borrowers now get more relief

Biden’s new SAVE Plan — which replaces the previous “Revised Pay As You Earn (REPAYE)” plan — is the government’s most affordable income-driven repayment plan so far. It’s available to nearly all federal borrowers.

Under the SAVE Plan, your payment amount will be calculated based on just 5% of your adjusted gross income — i.e., your income after taxes and living expenses — if you have undergraduate loans. This is half as much as it used to be, and this change will go into effect starting in July, 2024. Another perk: During July, all affected borrowers will have their payments put on hold for a month — a type of forbearance during which no interest will accrue. (Note that if you have graduate student loans, your payment will remain at that original amount: 10% of your adjusted gross income.)

Low-income borrowers can also qualify for a $0 monthly payment under the SAVE Plan — a perk that can provide major relief for those who need it most.

Borrowers with low balances can get faster forgiveness

SAVE Plan participants also have an easy path to forgiveness. If your initial federal student loan debt was $12,000 or less, you’ll receive forgiveness for any remaining balance after 10 years of payments. If you borrowed more, tack on an extra year of payments for every $1,000 extra you borrowed.

Keep in mind that debt cancellation is only available for federal student loan borrowers, meaning any private loans including federal debt refinanced with a private lender, are not eligible for cancellation. If you have private student loan debt, you’ll need to pursue alternate avenues for debt relief.

More public service workers can get loan forgiveness

Biden’s plan also expands income-driven repayment plans and intends to make it easier for borrowers to achieve public service loan forgiveness (PSLF) if they work in qualifying careers.

In 2022, President Biden introduced a limited PSLF waiver that gave borrowers more time to apply for credit toward PSLF. Biden also ordered loan servicers to put about 3.5 million borrowers into administrative forbearance to fix errors that could have compromised some borrowers’ eligibility for PSLF. According to the U.S. Department of Education, these and other PSLF adjustments have helped nearly 900,000 borrowers qualify for partial loan cancellation.

More changes to the PSLF program may also be afoot — the Department of Education has proposed changes to allow more kinds of payments to qualify for forgiveness so that it’s easier to achieve.

PSLF and IDR Plan enrollees can get interest accrual relief

Borrower’s loan balances can no longer increase while they’re making payments. Under previous plans, interest still accrued even if borrowers were not required to make monthly payments because their income was too low. Now, excess interest accrual will be paused for everyone on an income-driven plan until they resume normal payments.

You could get relief if you attended a for-profit institution

Finally, the Administration has proposed cracking down on institutions of higher education with track records of high rates of default among graduates and patterns of significantly increasing tuition costs to unsustainable levels. This includes publishing an annual “watch list of the programs with the worst debt levels in the country, so that students registering for the next academic year can steer clear of programs with poor outcomes,” the White House says. “They [these provisions] also include requesting institutional improvement plans from the worst actors that outline how the colleges with the most concerning debt outcomes intend to bring down debt levels.”

How does the student debt relief plan affect me?

The updates to the Biden-Harris Student Debt Relief plan significantly increased eligibility for income-driven repayment plans, so you may now be eligible to lower or indefinitely defer your monthly payments, even if you previously didn’t qualify. Here are a few examples from the Biden administration that show how your payments could change under the new rules.

Let’s say, for example, that you’re a public school teacher paying off an average undergraduate degree, and you make $44,000 per year. Previously, assuming average payments and loan balances, the Administration estimates you would have paid $197 per month. Now, under the new rules, you may be required to pay only $56 per month, amounting to savings of about $1,700 per year. The White House offered a few such examples of “typical” debt in the following graphic:

)

You can use StudentAid.gov’s loan simulator to estimate how your payments may change if you’re eligible for income-driven repayment plans.

The Biden-Harris student debt relief plan intends to provide the most relief to low- and middle-income borrowers for whom student loan payments are uncomfortably high.

“Middle-class borrowers struggle with high monthly payments and ballooning balances that make it harder for them to build wealth, like buying homes, putting away money for retirement, and starting small businesses,” the White House says. “For the most vulnerable borrowers, the effects of debt are even more crushing.”

The Administration says its plan also aims to reduce racial inequity in the United States. Black American borrowers are disproportionately burdened by debt, the White House says. The typical Black borrower who first enrolled in the 1995-1996 school year still owed about 95 percent of their original balance 20 years later.

“By targeting relief to borrowers with the highest economic need, the Administration’s actions are likely to help narrow the racial wealth gap,” the White House says.

If I’m not eligible for relief, what can I do?

If you’re not eligible for student loan relief under the Biden-Harris plan — or if you need additional help — there may still be ways for you to lower or pause your payments.

Direct Consolidation

Borrowers of federal student loans can apply for consolidation to simplify their repayment process. Consolidation bundles all of your student loan payments into a single monthly bill, regardless of how many student loan servicers you may be paying. You’ll receive a new interest rate that’s a weighted average of your existing interest rates.

You don’t need to have a financial need in order to consolidate your loans. It’s also important to note that consolidation won’t reduce the amount you owe and could ultimately cost you more money over time, as your new interest rate will be rounded up to the nearest eighth of a percent.

However, consolidation can be a wise move if you have loans not eligible for forgiveness under the Public Service Loan Forgiveness program (PSLF) — such as parent PLUS loans — which, once consolidated, may be eligible for forgiveness if and when you qualify.

Deferment

If you have federal student loans and are unable to make payments, you may be eligible for a deferment period that will temporarily pause your payments. You may also be eligible for deferment if you’re in an approved graduate fellow program; if you’re undergoing cancer treatment; if you’re engaged in full-time, active military service; if you’re unemployed, among other reasons.

Forbearance

If you’re unable to make payments on your private loans¹ for financial reasons, you may be able to negotiate a period of forbearance with your lender. During this period, you won’t be required to make payments however you will likely still accrue interest on your outstanding balance.

While this can cost you more money over time, it can prevent you from entering default (what happens when you stop making student loan payments without contacting your lender) which can hurt your credit score and make it harder for you to qualify for credit or a mortgage in the future.

Income-Based Repayment

Even if you’re not eligible for outright debt cancellation, you may be able to reduce your monthly payments by switching to an income-based repayment plan. These plans temporarily reduce — or pause — your minimum monthly student loan payment in proportion with your income and dependents. Under new rules established by the Biden-Harris plan, the federal government will cover any unpaid interest each month so your balance won’t be able to grow while you’re making payments.

PSLF

If you work in a qualifying public service job, you may be eligible for Public Service Loan Forgiveness. PSLF allows eligible federal student loan borrowers — such as some teachers, firefighters, first responders, and non-profit employees — to get all their remaining debt forgiven.

Usually, this option is only available to people who have made 10 years of qualifying, on-time payments. If you work for the military, or state, tribal, or federal government, you may be able to get forgiveness, or credit toward forgiveness, even if you weren’t previously working toward it. You can check your eligibility and apply at studentaid.gov.

Refinancing

Regardless of whether you have federal loans or private loans — you may be able to reduce those monthly payments and/or your total loan cost by refinancing your loans for a potentially lower interest rate².

Refinancing can also help you pay back your debt more quickly by restructuring your payments so that you pay down your principal balance faster. While this may require higher monthly payments, it could help you save money over time¹.

This can be a good option for you if you have remaining federal student debt after loan cancellation kicks in, if you have private student loans that aren’t eligible to be canceled, or if you make too much money to qualify for relief. You can refinance your loans with any lender of your choosing and, generally speaking, the more financially secure you are, the lower your interest rate can be. Just beware that once you refinance federal loans, you’re no longer eligible for debt cancellation under the Biden-Harris plan, loan forgiveness programs, income-based repayment plans, consolidation, or other protections that are exclusively available for federal borrowers.

So, if you don’t qualify for debt relief on account of an annual income that’s too high, you may be eligible to refinance for some of the lowest rates around, which could save you money over the course of your repayment period.

Interest rates for private loans change all the time, but you can apply to refinance your loans at any time, including before the student loan on-ramp period ends. Recently, the trend has been that interest rates are on the rise. You can lock in today’s rates by submitting an application to refinance.

Get Relief on Your Private Student Loans with Earnest

The Biden Administration has already launched a number of new student loan relief plans — and could announce more in the coming months. If you have federal student loans, it could be smart to avoid refinancing until all relief measures are announced. That way, you won’t risk missing out on forgiveness.

However, many of these programs could take years if not decades to go into effect. If you’re looking to pay off your student loan debt fast, refinancing could help you get a lower interest rate during the remaining years of your loan term — and therefore save hundreds of dollars in interest charges. Refinancing is also one of the best ways to get an interest rate reduction on current federal student loan debt. Find out how much you could save — and how much faster you could pay off your full student loan balance — by checking your interest rate with Earnest today. It takes just a couple of minutes and won’t hurt your credit score to check.

About the Author

Corey Buhay

Corey Buhay is a writer and editor based in Boulder, Colorado. She’s passionate about literature, the outdoors, and doing her taxes by hand. She has been writing about student loans and personal finance for Earnest since 2019. You’ll find her work in Outside Magazine, Backpacker Magazine, Smithsonian, and The Denver Post.