Where student-loan forgiveness now stands for millions of borrowers one year after Biden announced his broad debt relief plan

• One year ago today, Biden announced his broad student-debt relief plan.
• Since then, it faced legal hurdles, and the Supreme Court struck the relief down in June.
• Biden is developing a new student-debt relief plan, but payments are resuming soon without it.

One year ago today, millions of student-loan borrowers received the news some of them had been awaiting for decades — up to $20,000 of their student-loan balance would be wiped out. But they have yet to receive that relief.

President Joe Biden's announcement was a long time coming. Since he took office, his administration was weighing its options to get relief to borrowers, and Biden himself even questioned his authority to enact broad debt relief. But on August 24, 2022, his administration concluded that he had the authority to cancel student debt for federal borrowers using the HEROES Act of 2003, which allows the education secretary to waive or modify student-loan balances in connection with a national emergency. In this case, that emergency was COVID-19.

"For too many people, student loan debt has hindered their ability to achieve their dreams—including buying a home, starting a business, or providing for their family," Education Secretary Miguel Cardona said in a statement at the time. "Getting an education should set us free; not strap us down! That's why, since Day One, the Biden-Harris administration has worked to fix broken federal student aid programs and deliver unprecedented relief to borrowers."

About a month after the debt relief announcement, applications opened for federal borrowers to apply for an up to $20,000 reduction to their balances. It was a quick form that took about five minutes for borrowers to fill out, simply requiring their names, contact information, and Social Security number — and within weeks, 26 million borrowers submitted the application, and the Education Department approved 16 million of them for relief.

However, that momentum came to a halt in November, when two conservative-backed lawsuits succeeded in blocking implementation of the relief. The cases eventually went to the Supreme Court for oral arguments in February, and in June, the high court ultimately ruled that one of the cases had merit — and struck the debt relief down. While some conservative groups and Republican lawmakers celebrated the decision, borrowers were defeated.

"I had some apprehension about Biden's first plan for relief," one borrower previously told Insider. "And sure enough, that's exactly what happened. It did go all the way to the Supreme Court and was deemed ineligible. So it's been a roller coaster, and it's really frustrating. It's hard to be excited anymore."

Even with the Supreme Court ruling, Biden's administration has started implementing other reforms for borrowers, along with a new process for broad student-loan forgiveness using a different law. Here's where the relief currently stands.

Where student-debt relief now stands

The same day the Supreme Court struck down Biden's debt relief, the Education Department announced it would try again using the Higher Education Act of 1965, which does not require the reliance on a national emergency. However, the law requires the administration go through the negotiated rulemaking process, which requires periods of public comment, public hearings, and multiple rounds of negotiations with stakeholders to finalize a debt relief rule.

This process could take at least a year, and while the administration has not provided a specific timeline for when borrowers might see this new debt relief implemented, officials have said they will work to move as quickly as possible under the law.

"It's going to be months," Bharat Ramamurti, deputy director of the National Economic Council, told reporters in July. "I think, as I said, even the typical rulemaking process typically takes months. But we are aiming to do it as quickly as possible. And so, we will give you more updates as we hit each milestone in that process."

This means that borrowers will resume payments without a reduction to their balances. After three years, the student-loan payment pause is about to end — interest is beginning to accrue again in September, with bills coming due one month later. To ease the transition back into repayment, the Education Department announced a 12-month "on-ramp" period starting in October during which borrowers who miss payments will not be reported to credit agencies. But interest will still accrue during that period, and the department recommended borrowers who are able to make payments should do so.

Separately, thousands of borrowers have started seeing their loans forgiven through a one-time account adjustment for income-driven repayment plans. The adjustment allows the department to determine which borrowers have completed the required 20 or 25 years of payments on IDR plans, and so far, it announced it has approved 804,000 borrowers for $39 billion in relief.

The department also formally launched its new income-driven repayment plan, the SAVE plan, on Tuesday, which is intended to make monthly payments cheaper and prevent unpaid interest from building on balances. Senate Majority Leader Chuck Schumer said in a statement that "while there will be those that will challenge this in court, the administration has carefully crossed the legal t's and dotted the legal i's. The fight to cancel student debt is far from over, but this is a massive step in the right direction."