Supreme Court’s Student Loan Forgiveness Ruling 🏦
Last year, Biden unveiled his student loan forgiveness initiative, which was blocked by federal courts last fall. The initiative, if passed, would provide up to $20,000 in one-time student debt relief for up to 40 million borrowers. Over 26 million borrowers applied for relief under the plan, and over 16 million were approved. The U.S. Supreme Court held a hearing last month, and a decision is expected by June 30th. If the program is approved, borrowers may start receiving student loan forgiveness within weeks of that ruling. However, if the Court strikes down the program, the Biden administration may have to go back to the drawing board.
New Student Loan Forgiveness Regulations Are Coming 📰
The Biden administration has finalized sweeping new regulations that will impact many existing federal student loan forgiveness and discharge programs. These regulations will expand the definition of “qualifying payments” for Public Service Loan Forgiveness, expand the categories of school misconduct for Borrower Defense to Repayment, and make it easier for Social Security disability benefits recipients to qualify for Total and Permanent Disability discharge program. The new regulations will go into effect on July 1st, and will also include other significant changes, including limiting future interest capitalization.
Student Loan Pause Likely Ending 💸
The national student loan pause, which has suspended payments and interest on government-held federal student loans since March 2020, is now entering its fourth year. President Biden’s most recent extension of the student loan pause is set to end 60 days after either June 30th, 2023, or the date that the Supreme Court rules on the administration’s student loan forgiveness plan (whichever occurs first). That means that federal student loans covered by the pause would resume repayment by around August 30.
But Wait.. Politics 👨⚖️
It is difficult to say with certainty whether President Biden will extend the national student loan pause beyond its current expiration date. However, if he wishes to be re-elected for the next presidency run, it may be in his best interest to do so. Regardless of the outcome, it is always wise to be prepared for any contingency. As such, you should take proactive steps to ensure that you are ready to resume making payments on your federal student loans come August.
Keep an eye out for further updates on the Student Loan Forgiveness program and the payment pause!