Student loan payment was paused in 2020 during the Covid-19 period. In August 2022, a student loan forgiveness plan was proposed by the Biden administration. Since then, many borrowers have been on the lookout for its implementation.
The student loan forgiveness plan was taken to the Supreme Court. Many borrowers hoped for a favorable outcome. When will the Supreme Court rule on student loan forgiveness?
The President Joe Biden Student Loan Forgiveness Plan
The student loan forgiveness plan by the Biden administration was an effort to relieve borrowers of the after-effects of the COVID-19 pandemic. The loan forgiveness targets low and middle-income borrowers.
The Biden Administration loan forgiveness plan was worth $10,000 for federal borrowers. Pell Grant recipients who earned less than $125,000 yearly would have been forgiven $20,000 worth of loans. The loan forgiveness plan was proposed in 2022, and 26 million borrowers already applied for the program.
What Was the Supreme Court Rule On Student Loan Forgiveness?
After multiple decisions, the Supreme Court has ruled against the student loan forgiveness plan proposed by the Biden Administration.
The decision was on the basis that Biden did not have the authority to cancel over $400 billion worth of loan debt under the 2003 Act of Higher Education Relief Opportunities for Students.
When Will Repayment Start For Student Loan?
Due to the Supreme Court ruling, borrowers resumed loan payments as of September this year. Interest started incurring on student loans in October.
There are other initiatives put in place by the Biden administration to relieve borrowers of the burden of the sudden resumption of the loan payment.
12-month on-ramp payment allows borrowers to pay any amount they can afford without facing the consequences of late or missed payment. The on-ramp payment will last 12 months, and it has started since September.
Borrowers that have entered default before loan payment was paused in 2020 can start afresh. You can contact your loan servicer on how to register for a fresh start for default borrowers.
Possible Alternative For Student Loan Forgiveness
Your loan cannot be forgiven based on the 2022 mass loan forgiveness plan proposed by the Biden administration. The Supreme Court ruled against the plan in June this year. You can opt for other student loan forgiveness options.
- Teacher loan forgiveness
- Public Service Loan forgiveness
- Income-driven repayment plan
Note: Terms and requirements apply to all these student loan forgiveness programs. You will need to work in certain federal organizations and pay your loans for certain years.