Supreme Court Blocks One-Time Student Loan Forgiveness Plan
Biden-Harris Administration's Loan Cancellation Policy Faces Setback
Background on the Blocked Plan
The Supreme Court has temporarily blocked the implementation of President Biden's one-time student loan forgiveness plan, which would have provided up to $20,000 in cancellation for Pell Grant borrowers and up to $10,000 for other federal loan borrowers.
Additional Loan Forgiveness Options
Despite the Supreme Court's action, other loan forgiveness programs remain available. For every $1,000 borrowed above $12,000, borrowers can receive forgiveness after an additional year of payments through the income-driven repayment plan.
The Public Service Loan Forgiveness (PSLF) Program also allows borrowers to receive forgiveness of the remaining balance of their Direct Loans after they have made 120 qualifying monthly payments while working full-time in public service.
SAVE Plan Policy and Biden-Harris Administration's Progress
Borrowers receiving relief under the blocked plan would have been the first to benefit from a SAVE plan policy that provides debt forgiveness to borrowers who have made a certain number of on-time payments.
To date, the Biden-Harris Administration has approved a total of $14.36 billion in loan forgiveness for approximately 1.2 million borrowers.
Supreme Court's Reasoning and Next Steps
The Supreme Court's decision is based on procedural grounds, as the Biden-Harris Administration did not provide adequate public notice and comment on the plan before implementing it.
The Department of Education is reviewing the Court's ruling and will provide guidance on next steps for borrowers once available.
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