On June 30, 2023, the Supreme Court ruled that President Biden exceeded his authority under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 to cancel up to $20,000 of student loan debt for individual borrowers with an annual income of under $125,000 or under $250,000 for married couples. Due to its potential benefit to many psychologists, APA Services has advocated for broad-based student debt relief since the start of the Biden administration and was strongly disappointed with this ruling.
Shortly after the ruling, the administration announced that it will continue to move to cancel student debt, this time using the Department of Education’s Higher Education Act (HEA) authority. But unlike the HEROES Act, which allows for emergency actions, using the HEA requires a more time-consuming, formalized rule-making process, which the Department of Education has already initiated. APA Services once again joined coalition colleagues in support (PDF, 86KB)opens in new window, calling on the administration to move as swiftly as possible.
The administration also announced two additional student debt–related actions:
- Interest accrual on federal student debt will restart in September and repayments will begin in October for the first time in more than 3 years, but the Department of Education is instituting a 12-month moratorium on repayment delinquency. Between October 1, 2023, to September 30, 2024, any financially vulnerable borrowers who miss a monthly payment will not be reported to credit bureaus, placed in default, or referred to debt-collection agencies.
- The Department of Education has also finalized its new Income-Driven Repayment Plan. APA Services submitted comments on the plan during the public comment period earlier this year. Although most of the Saving on a Valuable Education (SAVE) planopens in new window will go into effect next July, several provisions—which APA Services strongly supports—will already be available to borrowers this summer. This includes protecting more discretionary income from repayment, waiving unpaid monthly interest, and excluding spousal income for borrowers who are married and file income taxes separately.
Finally, on July 1, new regulations governing the Public Service Loan Forgiveness (PSLF) program also went into effectopens in new window. This includes changes to the definition of qualifying employer and full-time employment, to the application and reconsideration processes, and to the calculation of payments, as well as the elimination of some interest capitalization. Many of these changes have long been part of the APA Services’s advocacy efforts, including through public comments on the proposed rule submitted last summer (PDF, 423KB)opens in new window.
For more information, contact Kenneth Polishchuk.