Update: Supreme Court Rejects Biden Student Loan Forgiveness Plan

Joe Biden

Update: Supreme Court Rejects Biden Student Loan Forgiveness Plan

Update: (Jun. 30, 2023): Well, it looks like you’ll be paying back those student loans after all.

Today (Jun. 30) the Supreme Court rejected President Joe Biden’s student loan forgiveness plan, which aimed to cancel or reduce student loan debts for millions of Americans. As you may recall, the plan would have canceled $10,000 in student loan debt for people bringing in less than $125,000 or households with less than $250,000 in income. On top of that, Pell Grant recipients would have had an additional $10,000 in debt forgiven.

Unfortunately, with a 6-3 decision, the Supreme Court ultimately ruled that the Biden administration overstepped its authority with the plan. As of now, student loan payments are set to restart in October and interest will start accruing in September.

[VIA 1,2,3]

Original story: (Jun. 15, 2023): Borrowers everywhere will soon learn the fate of their student loans.

According to reports, the Department of Education recently revealed plans to resume payments later this year. The decision comes just ahead of the Supreme Court’s case, which will determine whether or not a large portion of borrowers’ debt will be forgiven.

Joe Biden

As we reported back in August, President Joe Biden and his administration proposed and submitted legislation in an effort to greatly benefit millions of Americans. The bill would cancel out $10,000- $20,000 of debt for student loan borrowers making below a certain income a year. Speaking on the initiative, a spokesperson for the Department of Education reportedly stated:

“We recognize that the return to repayment would result in significant financial hardship for many borrowers. That is why this Administration also put forward a plan to provide up to $20,000 in debt relief for hard-working Americans recovering from the economic harms of the pandemic, most of whom make less than $75,000 a year, and why we continue to fight for that relief on behalf of the millions of borrowers who need it,” a Department of Education spokesperson said.

However, several states challenged the piece of legislation, causing it to be tied up in a legal battle, which the Supreme Court is expected to hand down a verdict on any day now. Ahead of the decision, the Department of Education did share that no matter the outcome, interest payments on any remaining balances will resume on September 1st, while payments will be due again beginning in October. It is noted, however, that exact payment dates could depend on how individual loan service handles the restart.

There will also reportedly be an income-driven repayment plan offered that will allow lower monthly payments and debt forgiveness after a certain number of payments have been met. More information about specific details and guidelines is expected to be shared as the new repayment dates approach.

[VIA]

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