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Without student loan forgiveness, what are my options?

by | Jul 3, 2023 | Student Loans

The US Supreme Court just ruled that the Department of Education is not authorized to forgive a large portion of their borrowers’ student loan debt. Multitudes of borrowers in the Harrisburg area now face budgeting student loan payments in addition to their other financial obligations. They will join the 43 million borrowers who have amassed $1.6 trillion in student loan debt in plotting how they will fit these payments, which commence in October for most borrowers, into their household budgets.

While it may appear that the only lifeline available has disappeared, alternative solutions are available to struggling borrowers. Reviewing your particular situation with a professional experienced in the field who will look out for your best interest could be the difference between surviving the financial impact of the Court’s decision and failing to be able to put together any type of reasonable response. Two solutions come to mind.

Income-Driven Repayment Plans for Student Loans

As I wrote in a previous blog, several options are offered for borrowers with direct loans from the Department of Education who cannot afford to re-pay their student loans in the traditional 10-year period. As set forth more extensively in the blog, these options include at least four options to reduce your monthly obligation by spreading your payments over a 20 to 25-year period and limiting payments to what you can afford. Even if you previously were unable to enroll in one of these programs, the eligibility standards have been modified to permit more borrowers to take advantage of these programs. Limitations are placed on each of these options, but you should be able to determine which suits you best through the use of DOE’s loan simulator. Once you determine which option best suits you, contact your loan servicer to discuss enrollment. Of course, if you need assistance, contact us and we can discuss your individual circumstances.

Discharge in Bankruptcy

If your financial troubles extend beyond your student loan debt, you may want to consider discussing your overall situation with an experienced lawyer. Having practiced bankruptcy law since 1995 and working as a staff attorney for the Standing Chapter 13 Trustee for 16 years, I know how to determine a client’s needs and how best we can use the Bankruptcy Code to appropriately resolve financial problems.

As I wrote in my prior blog, the Department of Education significantly revamped the bankruptcy procedures to streamline the discharge process. While the law remains the same, the new procedures clarify DOE procedures and what information it seeks in making its determinations. DOE further clarified which debts will be administratively discharged for situations such as permanent disability and other circumstances without even filing a lawsuit.


These are only two of the solutions available to resolving the oncoming budget crunch caused by student loans going back into repayment status. All is not lost. If you would like to discuss your particular situation with an experienced professional, contact us. We give second chances on Second Street.