Millions applied for student loan forgiveness before President Joe Biden’s plan was put on hold amid legal challenges. The forgiveness plan’s fate is now in the hands of the U.S. Supreme Court, which just heard arguments on the case.
Student Debt
The Supreme Court is about to hear arguments over President Joe Biden’s student debt relief plan, which impacts millions of borrowers who could see their loans wiped away or reduced.
About 26 million people had already applied to the program by the time a federal judge froze it on November 10, prompting the government to stop taking applications. No debt has been canceled thus far.
The ruling by the three-judge panel from the 8th U.S. Circuit Court of Appeals in St. Louis came days after a federal judge in Texas blocked the program, saying it usurped Congress’ power to make laws.
A new student loan debt relief plan will cancel up to $10,000 in federal loans for individuals making less than $125,000 a year. For low-income students who received Pell Grants, they can receive up to $20,000 in student loan forgiveness. According to research by Excelencia in Education, 50% of Latinos in higher education receive federal Pell Grants to help pay for college.
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Borrowers who earn less than $125,000 a year, or families earning less than $250,000, would be eligible for the $10,000 loan forgiveness, Biden announced. For recipients of Pell Grants, the federal government would cancel up to an additional $10,000 in federal loan debt.
Navient, the second largest student loan servicer in the U.S., agreed Thursday to cancel $1.7 billion in debt owed by more than 66,000 borrowers across the country as part of a multistate lawsuit that accused the company of abusive lending practices.
What began as a proposal by a presidential candidate has since turned into a heated debate over managing the nation's trillion dollar student debt burden.
Nearly 40 percent of recent college graduates don’t think they’ll pay off their student loan debt within 10 years, according to a new study.
After nearly a decade, household debt in the U.S. has surpassed its peak levels of the 2008 Great Recession.
One Illinois state representative hopes to stem the tide of rising student debt by making public colleges and universities free for all in-state residents.
