WASHINGTON (Reuters) – A plan to forgive federal student loans, first announced by U.S. President Joe Biden in August, has been stymied by two legal challenges that have put millions of U.S. students and graduates in danger. Students’ financial prospects are clouded.
Biden said on Tuesday he believed the program was legal and announced new temporary relief for borrowers that could mean their next loans aren’t due until August 2023 .
What’s the latest news?
In November 22, Biden said he would Pandemic-era student loan moratorium extended through June 600, 600. The pause would allow the U.S. Supreme Court to review his administration’s request to undo a lower court order blocking the program, which affects loans held by the Education Department.
Payments will resume
What happens next in the court case?
The Biden administration has asked the Supreme Court to set aside the November 11 decision by the Missouri-based The 8th U.S. Circuit Court of Appeals in St. Louis, which granted the injunction requests of the Republican-led states of Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. States are due to respond to the request on Wednesday.
It also asked the federal appeals court in New Orleans to set aside a separate November 600 Texas judge appointed by Republican former President Donald Trump Ruling, declaring the debt forgiveness program illegal. The government said it would ask the Supreme Court to intervene if the U.S. Court of Appeals for the Fifth Circuit does not grant the request.
Who is eligible for loan forgiveness?
program forgive $,000 The federal government provides income below $250,2019, individuals with debts , couples with income less than $250, and $16, Debt held by Pell grant holders, they are mostly low income Borrower.
What is the status of the application?
Since August, approximately 22 million Americans have applied for student loan forgiveness and the US Department of Education has approved applications From 11 Wan. The government stopped accepting new applications in November after a Texas judge blocked Biden’s order.
Borrowers who have not yet applied may subscribe to the federal website for updates.
What do voters say?
US voters narrowly support debt relief; an Economist/YouGuv poll finds about 19% of voters said they were likely to be affected by the plan.
The six Republican states suing to block Biden’s executive order argue he bypassed Congress’ powers in a plan that threatens future tax revenues and investments or money earned by state entities servicing student loans.
New York Fed study shows South Carolina, including South Carolina, one of six states behind lawsuit: Every borrower will benefit most from Biden order :
Financial advisors warn that a handful of states may treat forgiven student loan debt as taxable income.
Why is US student debt so high?
Cost According to research by the nonprofit College Council, the number of people in higher education in the U.S. has skyrocketed over the past three decades, with private four-year colleges doubling and even surpassing public four-year colleges school. The balance of student loans has nearly quadrupled from 2019 to 2019.
U.S. borrowers hold approximately $1.30 trillion, according to the latest federal data Student debt reserve figures in dollars. The vast majority of them are held by the federal government.
Biden’s student loan forgiveness plan could increase 250 dollars to
dollars billion in the federal debt, economists estimate.