Student Loan Debt Relief Supreme Court: The Supreme Court denied President Joe Biden's massive student loan forgiveness plan on Thursday. Instead, the court stated that it will hear full oral arguments from both sides of the issue on an expedited basis in February. According to its official procedures, it will then issue a final ruling, most likely in June, at the end of the current term.
In light of the legal challenges delaying debt forgiveness, the Biden administration issued some other extension of the federal student loan payment pause in November. The extension means that the pause will likely end at the end of June, depending on when courts reach a final decision on forgiveness.
The Education Department had also approved loan forgiveness for approximately 16 million borrowers under the program, but the relief has been on hold since the middle of October due to court challenges. According to the department, nearly 10 million extra borrowers are eligible for relief.
The 8th Circuit Court of Appeals issued an injunction last month prohibiting the Biden administration from carrying out the plan while this hears an appeal by Republican states who were turned down by a district court judge's decision to dismiss their lawsuit on the grounds that they lacked standing.
Payments will resume 60 days after the Department is granted permission to implement the program or the litigation is resolved, according to a press release from the Department of Education. Payments will resume on June 30 if the court decision is received before that date. If not, borrowers will have an additional 60 days before payments resume, pushing the deadline to the end of August.
As things stand, you should plan to resume payments in July as well as work with your loan servicer to make financial hardship accommodations. According to the Federal Student Aid website, Joe Biden loan forgiveness, the actual payment due date will be determined by your loan servicer, who will send you a statement no later than 21 days before payment is due.
The current order provides no additional leeway if the Supreme Court rules against the Biden administration. If the Supreme Court doesn't really allow debt forgiveness to proceed, the administration has not revealed a backup plan.
The administration claims that cares act student loan forgiveness seems to be legal under a 2003 law that grants the Secretary of Education special authority to waive the rules governing federal student loans in times of national emergency. The ongoing effects of the coronavirus pandemic, according to Biden and his aides, constitute such an emergency, and mass debt relief will indeed help avoid a spike in defaults and delinquencies once borrowers eventually resume payments.
Meanwhile, opponents of the plan argue that the ability to pause repayments during a crisis does not extend to permanent forgiveness of loans or large portions of them. Republicans claim that Biden's debt relief is an illegal attempt to circumvent Congress.
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