Student Loans: What We Do Know

Confused by where student loans lie right now? The government seems to be too!

What’s Happening Now

Your student loan payments were on pause, but they resumed a little over a month ago.

The Biden-Harris administration proposed a student loan forgiveness program that would wipe out up to $20,000 for certain debtors. However, in June of 2023, the The U.S. Supreme Court struck down Biden’s student loan forgiveness plan. Congress also passed a law preventing further payment pauses on student loan payments. You should have started repayment October 1st.

To help you remember, the government will send you a notice when your loans are due, but it’s best to sign up at for updates, just in case. You don’t want to miss those payments, because there will be consequences if you do, like interest and fees.

Future options for debt forgiveness

Income-based repayment plans have long existed within the U.S. Department of Education. They include The Public Service Loan Forgiveness and REPAYE plans. To see if you qualify, go to, or talk with your tax strategist, as many of the older repayment plans have tax consequences and tax burdens associated with them.

The Biden-Harris Administration has proposed a new form of Income-Based Repayment, called SAVE.

The proposed regulations would amend the terms of the Revised Pay As You Earn (REPAYE) plan to offer $0 monthly payments for any individual borrower who makes less than roughly $30,600 annually and any borrower in a family of four who makes less than about $62,400. 

The draft rule would:

  • Require borrowers to pay no more than 5% of their discretionary income monthly on undergraduate loans. This is down from the 10% available under the most recent income-driven repayment plan.
  • Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
  • Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with loan balances of $12,000 or less.
  • Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low. 

Everything is still in flux, though, and a lot of misinformation and scams are out there. Be sure to go to or talk to your tax professional to make sure you’re getting the most up to date and accurate information you can.

And if you need help figuring out how student loan payments affect your wallet, contact Paragon today!