BIDEN’S STUDENT LOAN FORGIVENESS UPDATE
In August, Joe Biden announced his student loan forgiveness plan. The plan included erasing up to $10,000 in federal student debt for borrowers making less than $125,000 a year — or $250,000 for married couples.
However, a federal judge in Texas struck down the program stating the action plan was illegal. Biden has faced many legal troubles with the student loan forgiveness plan including it already being on hold due to a separate legal challenge, but the administration continued accepting applications.
The Texas decision “makes it more likely that the issue will ultimately go to the Supreme Court, though it is still too early to say,” said Abby Shafroth, staff attorney at the National Consumer Law Center.
With the many legal issues still pending, it’s possible that the administration could extend the payment pause on the monthly bills yet again.
“I’m sure they have to be considering it as an option,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
If the president’s policy remains blocked in the courts by the end of the year, higher education expert Mark Kantrowitz said, “the Biden Administration is likely to further extend the payment pause.”
Thus, borrowers will have to wait for the government’s appeal to the 5th Circuit Court to play out. A great way to keep up with the numerous legal challenges is to subscribe to updates from the Department of Education and check the Federal Student Aid website for further information.
