• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic

3

Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants

1

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year

2

Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic

3

Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants
Personal Financestudent loans and debt

Borrowers who hate Biden’s student loan forgiveness plan can now keep their debt

Alicia Adamczyk
By
Alicia Adamczyk
Alicia Adamczyk
Senior Writer
Down Arrow Button Icon
Alicia Adamczyk
By
Alicia Adamczyk
Alicia Adamczyk
Senior Writer
Down Arrow Button Icon
September 29, 2022, 12:11 PM ET
Worried businessman using laptop while sitting by window in office
Borrowers will be able to opt out of automatic student loan forgiveness.Maskot/Getty Images
Add Fortune on Google for similar content.

An estimated 8 million federal student loan borrowers are set to receive forgiveness automatically under President Joe Biden’s one-time cancelation plan. But the U.S. Department of Education quietly updated their website this week to say that borrowers can opt out if they so wish.

That’s in response to a lawsuit filed Tuesday by the libertarian Pacific Legal Foundation to block Biden’s relief effort. Frank Garrison, a potential recipient of automatic student loan forgiveness and lawyer at the firm, is named in the suit, which calls Biden’s plan an illegal overreach that would increase his state tax burden.

According to the suit, Garrison would get $20,000 in debt forgiven. But his tax bill will increase by $1,000 if he receives the automatic forgiveness, because he lives in Indiana, one of several states that plans to tax the debt forgiveness. (The federal government will not tax the relief.)

Otherwise, Garrison argues he will eventually be eligible for Public Service Loan Forgiveness—a separate program that forgives debt of qualifying public service workers after 10 years of on-time payments—which comes with no tax burden at all, no matter what state recipients live in. He is currently on an income-driven repayment plan and certifies his income with the Department of Education each year.

In response, the Department of Education and the White House now say that the borrowers who would receive the forgiveness automatically will be able to opt out (and anyone else who doesn’t want to receive forgiveness need not apply).

The claim is baseless for a simple reason: No one will be forced to get debt relief. Anyone who does not want debt relief can choose to opt out. https://t.co/rtjNulKyWQ

— Abdullah Hasan (@AHasan46) September 27, 2022

“If you would like to opt out of debt relief for any reason, including because you are concerned about a state tax liability, you will be given an opportunity to opt out,” the Federal Student Aid FAQ on the relief effort was updated to read.

There is no other information currently given on how borrowers will be able to do this. The Department of Education rerouted Fortune‘s question about the suit to a White House press secretary, who did not respond.

The Department also filed a notice Wednesday with the Southern District Court of Indiana to say Garrison specifically has been removed from automatic forgiveness.

“Upon receiving this lawsuit and reviewing Plaintiff’s filings, the Department has already taken steps to effectuate Plaintiff’s clearly stated desire to opt out of the program and not receive $20,000 in automatic
cancellation of his federal student loan debt, and so notified Plaintiff’s counsel today,” the notice reads.

Screenshot of FSA FAQ
StudentAid.gov

Biden’s plan would forgive up to $10,000 for some federal borrowers and up to $20,000 for others. Most people will need to apply for forgiveness when an online application becomes available at the beginning of October.

Conservative groups have been searching for a way to challenge debt cancellation prior to Biden’s official announcement in August. They contend it is unfair to those who have already repaid their debt, as well as to those who have not attended college.

“Cancelling student debt…will only lead to more calls for government intervention in education at taxpayers’ expense,” Steve Simpson, senior attorney at Pacific Legal Foundation, said in a statement. “Loan cancellation will make Americans more divided, as those who paid their loans—or never went to college—will have good reason to think that we no longer have a government of, by, and for the people.”

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

About the Author
Alicia Adamczyk
By Alicia AdamczykSenior Writer
LinkedIn iconTwitter icon

Alicia Adamczyk is a former New York City-based senior writer at Fortune, covering personal finance, investing, and retirement.

See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Personal Finance

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Personal Finance

Students happy outside of school
SuccessColleges and Universities
One U.S. college is fixing tuition at just 10% of parental income: ‘We’re not hiding the cost of college behind secret formulas’
By Emma BurleighJune 25, 2026
9 hours ago
Personal Liability Insurance for Homeowners: Coverage and Common Exclusions Explained
Personal FinanceInsurance
Personal Liability Insurance for Homeowners: Coverage and Common Exclusions Explained
By Joseph HostetlerJune 25, 2026
9 hours ago
Business Owner’s Policy (BOP) Insurance: The Smart Coverage Bundle Many Small Businesses Overlook
Personal FinanceInsurance
Business Owner’s Policy (BOP) Insurance: The Smart Coverage Bundle Many Small Businesses Overlook
By Joseph HostetlerJune 25, 2026
9 hours ago
What Is General Liability Insurance for Small Businesses?
Personal FinanceInsurance
What Is General Liability Insurance for Small Businesses?
By Joseph HostetlerJune 25, 2026
9 hours ago
TIAA CEO Thasunda Brown Ducket
SuccessFortune 500: Titans and Disruptors of Industry
TIAA’s CEO made $26,000 in her first job but still maxed out her 401(k). She has advice for Gen Z
By Emma BurleighJune 25, 2026
10 hours ago
Top CD rates from major banks June 25, 2026: Chase CDs, Bank of America CDs, Citibank CDs, and more
Personal FinanceCertificates of Deposit (CDs)
Top CD rates from major banks on June 25, 2026: Chase CDs, Bank of America CDs, Citibank CDs, and more
By Joseph HostetlerJune 25, 2026
11 hours ago

Most Popular

MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
Success
MacKenzie Scott alone accounted for one-third of America's $19.2 billion in megagifts last year
By Sydney LakeJune 25, 2026
17 hours ago
Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic
Success
Now worth $200 million, Sarah Jessica Parker credits being ‘one of eight kids that struggled financially’ for her hunger, ambition, and work ethic
By Orianna Rosa RoyleJune 24, 2026
2 days ago
Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants
Success
Ikea’s billionaire founder was so frugal that he bought clothes from flea markets and took free salt and pepper from restaurants
By Orianna Rosa RoyleJune 25, 2026
17 hours ago
Ray Dalio just finished a 10-day trip to China. He says global leaders know America ‘doesn’t have what it takes to fight to maintain its empire’
Asia
Ray Dalio just finished a 10-day trip to China. He says global leaders know America ‘doesn’t have what it takes to fight to maintain its empire’
By Nick LichtenbergJune 24, 2026
1 day ago
After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
Success
After forcing workers back to the office, Goldman Sachs and JPMorgan Chase are now letting their staff work remotely—but only for the World Cup
By Orianna Rosa RoyleJune 23, 2026
3 days ago
Amazon's record Prime Day masks a darker truth: Americans are spending more and getting less
Retail
Amazon's record Prime Day masks a darker truth: Americans are spending more and getting less
By Nick LichtenbergJune 24, 2026
1 day ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.