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  1. Personal Finance
  2. Student Loan Debt

Biden Reveals New Student Loan Forgiveness Plan — Here's What Borrowers Can Expect Next

By: Kaitlin Mulhere
Kaitlin Mulhere, expert in Student loans, college costs, and Editor at Money
Kaitlin Mulhere
Editor | Joined March 2015
Kaitlin Mulhere has been covering the intersection of college and personal finance since 2015. She enjoys breaking down the complexities of college costs and financial aid, and she also runs Money’s Best Colleges rankings.
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,  Adam Hardy
Adam Hardy, expert in Personal finance, student loans, credit, job market, low-income finances, and Lead data journalist at Money
Adam Hardy
Lead data journalist | Joined May 2024
Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and many other outlets.
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and Julia Glum
Julia Glum, expert in the IRS, taxes, credit scores, saving, colleges, mobile payment apps, and News Editor at Money
Julia Glum
News Editor | Joined February 2018
Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money.
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Published: Jun 30, 2023 10 min read
People protest as SCOTUS Strikes Down Biden's Student Loan Forgiveness Plan
Getty Images

President Joe Biden will try to accomplish his long-promised student loan forgiveness through a new avenue after the U.S. Supreme Court blocked his original plan to forgive the debts of millions of borrowers.

The administration is starting a regulatory process to attempt to cancel student debt through a 1965 law called the Higher Eduction Act, Biden told reporters Friday, saying the process would take longer than his now-blocked 2022 proposal but is more legally sound.

The president's comments came as borrowers were still trying to digest the court's decision that the Biden administration did not have the authority to cancel over $400 billion worth of debt in the manner proposed. Admittedly, there's a lot that's not clear at this point about the timeline or next steps for borrowers.

But here's what we do know:

Biden has a new plan for student loan forgiveness

The court ruled that the Education Department did not have the authority to broadly forgive student loan debt under the HEROES Act, which is tied to national emergencies. Even before the decision dropped on Friday, some lawmakers and advocates were pushing the Biden administration to try for large-scale debt forgiveness using the Higher Education Act, or HEA, which legally grants the secretary of education the power to "compromise, waive or release" federal loans.

That's what Biden said he would do — but through a regulatory process called negotiated rulemaking, which requires a period for public comments and then several meetings for negotiators to weigh in on the new rule. It's unclear whether the administration is proposing the same amount of cancellation this time around.

We also don't know how long this process might last. Bharat Ramamurti, deputy director of the National Economic Council, said Friday the administration's new path will take months, though negotiated rulemaking processes regularly last at least a year.