Alternatives to student loan forgiveness: What other options are there for student debt problems?

Student loan forgiveness is to be shaped by the decision of the Supreme Court, which has been reviewing the measure since November. Now stacked with conservative judges, the body is set to rule on the loan forgiveness plan on 30 June. If the Court gives the go-ahead to the programme students who qualify for debt forgiveness will receive it if they have signed up.

However, if the court strikes down the measure then students are once again in a sticky wicket. Federal student loan repayments would resume after 30 August after the final extension lapses.

Here are options for students to manage repayments if forgiveness plans fall through.

Alternatives to student loan forgiveness

Income-driven repayment plans adjust your monthly payments based on your income and family size, making them more affordable. The government offers four income-driven repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR).

Student-loan borrowers can take advantage of Public Service Loan Forgiveness (PSLF) programme. This programme forgives the remaining balance on your federal Direct Loans after you have made 120 qualifying payments while working full-time for a qualifying employer in public service or non-profit organisations. This provides the possibility for a borrower to have their debt cancelled in 10 to 20 years, respectively.

The White House also announced proposed changes to shorten the time for debt to be forgiven under IDR plans to just 10 years of payments, even if those payments are for zero dollars per month, in some cases. The proposal could also cut payments in half by raising the threshold for income protected from repayment in addtion to stopping interest from accumulating if monthly payments are made.