• March 7, 2024
  • Posted by General Electric Credit Union
  • 4 read

New Federal Student Loan Forgiveness Policies to Know in 2024

After the Biden administration’s wide-spread student loan relief program was struck down by the Supreme Court in June of 2023, they re-strategized to instead focus on targeted relief efforts. A few of these initiatives rolled out in recent months. Use this guide to familiarize yourself with what they are and qualifications for debt forgiveness. 

  • Need a refresher on what happened to the Administration’s original student loan forgiveness plan? We’ve got you covered in this brief guide

Already rolled out

Low-balance student loan forgiveness

As of February 2024, federal student loan borrowers of less than $21,000 may qualify for low balance student loan forgiveness—but they must be enrolled in the Administration’s new income-based repayment plan (SAVE). 

Here’s how it works:

  • Your debts are automatically erased if you borrowed $12,000 or less and have been in repayment for at least 10 years.
  • Each additional $1,000—up to $21,000—increases the window by one year. For example, if you owe $14,000, your debts are forgiven after 12 years.

IDR Account Adjustment

IDR plans were initially introduced in the 90s, but recent program adjustments will now broaden qualifications for forgiveness. You don’t need to have previously enrolled in an IDR plan. 

Here’s how it works: 

  • You qualify if you’ve made 20 or 25 years of payments (between 240 and 300 monthly payments); or submitted a Public Service Loan Forgiveness (PSLF) application and submitted 120 or more payments.
  • The adjustment will be automatic for most qualified borrowers. You’ll receive an email notification from the Department of Education before the change is processed. 

Coming later

Hardship and predatory schools

The Administration announced in January 2024 that forgiveness is coming for borrowers experiencing financial hardship. Currently, there aren’t many details about eligibility available. However, bankruptcy eligibility may provide guardrails (e.g. such as in the case a borrower is unable to maintain a minimal standard of living). 

Other areas of discussion are in cases where an individual owes more than they initially borrowed and individuals who attended “predatory schools.” For example, a school may have sold them on false promises or misrepresented job or income prospects. The Borrower Defense to Repayment application is an existing avenue to potentially discharge your loans if you believe the school you attended falls into this category. 

Loan payments may have been a big part of your financial life since you last attended college, but there are programs available—and coming—that could provide relief. Stay up to date on the latest student loan forgiveness news through the Federal Student Aid website

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