Supreme Court Blocks Student Debt Forgiveness
Supreme Court Strikes Down $10,000 Student Loan Forgiveness
After waiting more than a year, student loan borrowers will not receive blanket loan forgiveness, following a decision by the Supreme Court at the end of June. President Biden’s plan to forgive up to $10,000 of federal loans for each borrower making less than $125,000/year—or up to $20,000, if they had received need-based Pell Grant—hinged upon the 2003 HEROES Act, and had been hotly debated by pundits, industry professionals, and legal experts. Predictably, justices split along party lines in a 6-3 decision, receiving both praise and condemnation from different sides of the media.
What’s Next? Preparing to Resume Student Loan Payment following the Court’s Decision
The Supreme Court’s decision comes just as millions of borrowers prepare to resume paying their federal loans after more than three years of administrative forbearance. Originally, the payment restart was tied to the pending ruling, but the recent debt ceiling agreement cemented October 1st as the start date. Now, in the wake of sprawling inflation and continued fear and uncertainty about the economy, over 40 million borrowers have $10k-20k more loans to worry about than they had hoped. Among them 20 million borrowers would have had their entire balances forgiven, including a disproportionately high proportion of Black and Latinx borrowers, who tend to rely more heavily on need-based Pell Grants than their white colleagues.
If the Supreme Court decision has left you reeling, and you’re not sure what to do next, give your student loan professionals a call. We have tools to help you prepare to resume repayment, and can help you chart a course amid changing regulations. We’re here to help you back on track, even with this is an unexpected detour!
If you have Federal Student Loans, schedule your free 15-minute Discovery Session to find out if your loans can be forgiven after 25 years.