President Biden’s student-loan forgiveness plan will finally end a months-long deadlock in court this week.
With payments set to resume in October after years of pandemic-related suspensions, the upcoming Supreme Court ruling on the legality of Biden’s proposal is the final piece of the student-loan puzzle, and the prospects for the future are uncertain. become clearer.
The conservative-majority Supreme Court could announce its decision as early as Tuesday morning, but many borrowers are concerned after hearings in February appeared skeptical of Biden’s plans. there is
“Too many people are living just below their paychecks because of massive student loans.
Judges have heard two cases opposing the waiver plan. One was filed by two individual student loan borrowers and the other by six Republican attorneys general.
Judges must first decide whether the dissenters are entitled to sue the government over the plan. Plaintiffs will also have to pass this hurdle to get the case considered, at which point the court will decide whether the government has the authority to carry out the proposal.
Democrats have tried to keep an optimistic tone, but Mr. Biden himself has expressed skepticism even about the idea that the Supreme Court will rule in his favor.
“We are confident that we are on the right side of the law. We are not yet confident about the outcome of the decision,” he said in March.
Supporters found a glimmer of hope Friday after a court announced an 8-1 ruling in a lawsuit in which two Republican states sought to challenge the Biden administration over immigration policies. The High Court ruled against both states, finding them ineligible to sue.
If this plan is ruled legal, the timeline of events becomes a little unclear.
Last year, the Department of Education released a simple two-minute form that borrowers can complete to apply for debt forgiveness. Most borrowers get up to $10,000, and Pell subsidy recipients get up to $20,000.
About 26 million people filled out applications while they were being filed, and more than 16 million were approved for relief before a court order forced the administration to remove the applications.
It’s unclear how quickly things will go if the court abandons the plan, but the ministry has previously said it was ready to put the application back online, and has already provided information on those whose relief has been approved to debt collection firms. are sending to
Advocates will also seek an extension to the application deadline, as borrowers were supposed to apply between last fall and the end of 2023 before the plan was put on hold in court.
Borrowers will not expect any relief if the plan is terminated, while interest rates on loans will resume on Sept. 1 and payments will resume on Oct. 1.
Republicans have been calling for this outcome for months, arguing that the $400 billion plan is unfair to those who never went to college or paid off student loans without assistance.
“Moreover, this administration is bypassing the elected Congress to protect the interests of the American people,” said Rep. Virginia Fox, RN.C., chairman of the House Education and Labor Committee, previously said. . “Congress is the only agency with the power to enact this kind of sweeping and fundamental reform, and it is absurd to think that President Biden can easily ignore the will of the American people.”
The $10,000 student debt relief is one of the president’s signature campaign promises, and he’s in trouble because the administration refuses to disclose whether it has a back-up plan to deliver on that promise. deaf.
“Black borrowers have been disproportionately impacted by student loan debt, and payments may resume in October, so regardless of what happens with this SCOTUS decision, black voters will be disproportionately affected. So we need to be clear that we have to make sure that student loans are canceled because the ones who benefit the most are the borrowers,” said Satra Taylor, director of higher education and labor policy at Young Invincibles. told The Hill at a rally outside the White House last week.
Regardless of the outcome, borrowers should be prepared to get their student loan payments back this fall.
Student-loan advocates had hoped they could seek further extensions regardless of the Supreme Court decision, but Mr. Biden struck a bipartisan deal with House Speaker Kevin McCarthy (Republican, California) on raising the debt ceiling. As part of the plan, it nevertheless confirmed the resumption of payments this fall. result of the high court decision.
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