Biden’s Student Loan Forgiveness: What Ended and What Remains

Biden’s student loan forgiveness plan to cancel $10,000 to $20,000 per borrower was struck down by the Supreme Court in June 2023, and no one received relief under that specific program. What survived is a set of older statutory forgiveness programs the Biden administration expanded and cleaned up, most of which are still available in 2026. The SAVE repayment plan is gone, and a temporary tax break on forgiven loans has expired.

What Happened to the $10,000 to $20,000 Cancellation Plan

The August 2022 plan would have cancelled $10,000 in federal student debt for borrowers earning under $125,000 individually (or $250,000 for married couples filing jointly), with an additional $10,000 for Pell Grant recipients. The administration relied on the HEROES Act of 2003, treating the COVID-19 pandemic as the national emergency that triggered the Secretary of Education’s authority to waive or modify loan rules.

Six states sued. On June 30, 2023, the Supreme Court ruled 6–3 in Biden v. Nebraska that the HEROES Act did not authorize cancelling roughly $430 billion in student loan principal. The Court held that waiving or modifying rules is not the same as rewriting the statute “from the ground up.”¹ The application portal closed. The income cutoffs and Pell Grant bonus tied to that plan no longer apply to anything.

A second attempt through negotiated rulemaking under the Higher Education Act ran into its own court challenges and was never fully implemented before the Biden administration ended in January 2025.

Relief That Did Go Through

While the broad cancellation failed, the Department of Education pushed relief through existing programs that had long been underused. The biggest change came from a one-time payment count adjustment for income-driven repayment, completed in fall 2024. It credited borrowers for past deferments, forbearances, and other periods that should have counted toward the 20- or 25-year IDR forgiveness clock. More than 3.6 million Direct Loan borrowers received at least three additional years of credit, and many had remaining balances cancelled automatically.²

Updated counts began showing up in borrower accounts in January 2025. Any payment progress after September 2024 runs through regular servicer processing. The special adjustment is over.

SAVE Is No Longer an Option

The Saving on a Valuable Education plan was Biden’s income-driven repayment plan built to lower monthly payments and shorten the road to forgiveness. Courts blocked its key provisions. A settlement between the Department of Education and Missouri formally ended it. The Department has called SAVE “unlawful” and “defunct,” is not enrolling new borrowers, has denied every pending application, and is moving current enrollees into other plans.³

If you were on SAVE, log into StudentAid.gov and confirm which plan you have been placed in and what your new payment is. If you don’t pick a plan, your servicer will pick one for you.

Forgiveness Programs Still Available in 2026

Several statutory programs survived the Supreme Court decision and the end of SAVE. Each has its own rules, and nearly all of them require federal Direct Loans.

Public Service Loan Forgiveness

PSLF cancels the remaining balance on your Direct Loans after 120 qualifying monthly payments made while working full-time for a qualifying employer. That’s about 10 years, and the payments don’t have to be consecutive.⁴

Qualifying employers include federal, state, local, and tribal government (military service counts), the Peace Corps, AmeriCorps, and tax-exempt 501(c)(3) nonprofits. Some other nonprofits qualify if a majority of their staff work on public services. Labor unions, partisan political organizations, and for-profit companies do not qualify, even under a government contract.⁴

Only non-defaulted Direct Loans are eligible. FFEL and Perkins loans have to be consolidated into a Direct Consolidation Loan first, and that consolidation now resets the PSLF payment count to zero. The one-time adjustment that used to credit past payments after consolidation ended in 2024. Certify your employment every year and whenever you change jobs, using the PSLF Help Tool at StudentAid.gov.

Income-Driven Repayment Forgiveness

IDR plans set your monthly payment as a share of discretionary income and cancel the remaining balance after a fixed number of qualifying payments. The clock depends on which plan you’re on:

Income-Based Repayment (IBR): 20 years if you were a new borrower on or after July 1, 2014; 25 years if you borrowed before that.
Pay As You Earn (PAYE): 20 years. Scheduled for elimination by July 1, 2028, with remaining borrowers transferred to another plan; payments already made will carry over.
Income-Contingent Repayment (ICR): 25 years. Also scheduled for elimination by July 1, 2028, with the same transfer provisions.
Repayment Assistance Plan (RAP): A new plan expected around July 2026, with a 30-year forgiveness timeline. Payments from other IDR plans count toward the RAP total.

These are counts of qualifying monthly payments, not calendar years. Thanks to the 2024 adjustment, past periods of economic hardship deferment and certain forbearances may already sit in your total.²

Closed School Discharge

If your school closed while you were enrolled, while you were on an approved leave of absence, or within 180 days after you withdrew, you can get a full discharge of your federal loans for that program. Direct, FFEL, and Perkins loans all qualify.⁵

For schools closing on or after July 1, 2023, eligible borrowers generally receive an automatic discharge one year after the Department establishes the closure date. You can apply sooner. Transferring credits to another school doesn’t disqualify you, but completing your program or graduating before the closure does.

Borrower Defense to Repayment

Borrower defense cancels federal Direct Loans if your school defrauded you through intentional misrepresentation or violated state consumer protection laws. Inflated job placement rates, false claims about accreditation, and lies about credit transferability are common grounds.

File online with your FSA ID or by mail using the PDF application.⁶ Include enrollment agreements, marketing materials, and any communications from the school. If your claim is denied, you can request reconsideration with new evidence. FFEL and Perkins borrowers have to consolidate into Direct Loans before filing.

Total and Permanent Disability Discharge

Borrowers who are totally and permanently disabled can have their federal loans discharged. You qualify through one of three routes: VA documentation of a 100% service-connected disability or total disability based on individual unemployability; SSA documentation showing SSDI or SSI with specific review scheduling; or a physician’s certification that you can’t engage in substantial gainful activity due to a condition expected to last at least 60 months or result in death.⁷

If you qualify through SSA documentation or a physician’s certification, a three-year monitoring period follows the discharge. Taking out a new federal student loan or TEACH Grant in that window voids the discharge.

Teacher Loan Forgiveness

Teachers who work full-time for five complete, consecutive academic years at a qualifying low-income school can receive up to $17,500 in forgiveness on Direct or Federal Stafford Loans.⁸ The school has to be in a Title I district and listed in the Department’s Annual Directory of Designated Low-Income Schools. The $17,500 maximum applies to highly qualified math, science, and special education teachers; other qualifying teachers receive up to $5,000.

Which Loans Actually Qualify

Almost every current forgiveness program requires Direct Loans: Direct Subsidized, Direct Unsubsidized, Direct PLUS (parent and grad), and Direct Consolidation. If your loans are already Direct, you’re set.

Older Federal Family Education Loans, issued by private lenders with a federal guarantee, generally need to be consolidated into a Direct Consolidation Loan before they can access PSLF or IDR forgiveness.⁹ Consolidation is free through StudentAid.gov. It can reset your payment count depending on the program, so if you already have years of qualifying payments, think through the tradeoff first.

Private student loans from banks, credit unions, or other non-federal lenders do not qualify for any federal forgiveness program, and there is no workaround. If you aren’t sure which type you have, StudentAid.gov shows every federal loan on file under your account.

Taxes on Forgiven Loans in 2026

The American Rescue Plan Act of 2021 kept forgiven student loan debt out of federal taxable income, but that exclusion expired on December 31, 2025. Starting in 2026, balances cancelled under an income-driven repayment plan are generally treated as cancellation of debt income and included in your gross income for federal tax purposes.¹⁰ You will receive a Form 1099-C from your servicer the following January or February and must report the forgiven amount on your return.

Not every discharge triggers a tax bill. Federal law permanently excludes forgiveness through PSLF, Teacher Loan Forgiveness, and discharges due to death or total and permanent disability.¹¹ Closed school discharges and successful borrower defense claims are also generally not taxable.¹⁰

The exposure falls hardest on borrowers approaching 20- or 25-year IDR forgiveness. An $80,000 discharge added to your income for the year could push you into a higher bracket and generate a tax bill in the five figures. If your total liabilities exceed the fair market value of your assets at the time of discharge, you may be able to exclude some or all of the forgiven amount by filing IRS Form 982 under the insolvency exception.¹⁰

State treatment varies. Many states with an income tax conform to current federal definitions and won’t add a bill beyond what the IRS charges. Others use older federal definitions or their own rules. If a large IDR balance is coming due for forgiveness, talk to a tax professional in your state before it lands.

1
Supreme Court of the United States. Biden v. Nebraska, 600 U.S. 477 (2023)
2
Federal Student Aid. Payment Count Adjustments Toward Income-Driven Repayment and Public Service Loan Forgiveness
3
U.S. Department of Education. Next Steps for Borrowers Enrolled in Unlawful SAVE Plan
4
Federal Student Aid. Public Service Loan Forgiveness Help Tool
5
Federal Student Aid. Closed School Discharge
6
Federal Student Aid. Borrower Defense to Repayment Application
7
Federal Student Aid. Total and Permanent Disability Discharge
8
Federal Student Aid. Teacher Loan Forgiveness
9
Federal Student Aid. What to Know About Federal Family Education Loan Program Loans
10
Taxpayer Advocate Service. What to Know About Student Loan Forgiveness and Your Taxes
11
Office of the Law Revision Counsel. 26 U.S.C. 108 – Income From Discharge of Indebtedness