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The Latest on Biden's Student Loan Forgiveness Plan & COVID Deferment

by Lawrence Rand | March 24, 2023

After the Supreme Court’s historic hearing on February 28th that will determine the fate of President Joe Biden’s student loan forgiveness initiative, millions of borrowers are anxiously awaiting updates.

Biden’s plan, if it goes forward, would eliminate $10,000 in federal student loan debt for borrowers who earned under $125,000 in income in 2020 or 2021 ($250,000 if married).  Federal courts blocked the initiative last fall following multiple legal challenges and the administration appealed two of those challenges to the Supreme Court, which held an oral argument hearing last month.  The Court is expected to issue a decision in June.

Following the Supreme Court hearing, the Education Department sent out a mass email assuring borrowers that Biden’s student loan forgiveness plan is legal and that the administration would continue to try to provide relief.  “We will continue to provide you updates and will notify borrowers directly before payments restart,” wrote Secretary of Education Miguel Cardona, noting, “Payments will resume 60 days after the Supreme Court announces its decision. If it has not made a decision or resolved the litigation by June 30, payments will resume 60 days after that.”

Currently, student loan debt in the United States exceeds $1.7 trillion, and it is estimated that more than 40 million Americans have student loans.  

If the Supreme Court rules in favor of the president, it could provide much-needed relief to many borrowers who are struggling to make ends meet.  However, if the court rules against the president, it will likely mean that Congress will need to pass legislation to provide student loan forgiveness.

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