I'm not too hopeful about it happening. It holds me back from saving money. It's *** waiting game for 43 million Americans who have federal student loans. Maybe the Biden administration will pull through, but you never know. President Joe Biden introduced the plan in two 2022 to cancel up to $20,000 in federal student debt. But borrowers are holding their breath after the plan was put on hold while it moves through the courts, it's now up to the Supreme Court to settle the program's legality is hope on the horizon. We'll explain what the plan means for all americans and the possible outcomes. This is clarified. Student loan debt has reached an all time high with the federal student loan debt totaling to *** whopping $1.6 trillion. On average, borrowers carry around $30,000 in debt. Several factors contribute to the mountain of debt, including an increase in tuition prices in just 30 years from the 1990s to the 2020s. The average tuition increase from around $4,000 to around $10,000 at public four-year colleges and from around $19,000, Around $38,000 at private nonprofit four-year colleges as tuition increases. So has the need to take out more loans to afford it. About 92% of all student debt is federal student loans, which means *** federal forgiveness program could change the lives of millions In October 2022, President Biden launched his forgiveness plan. Our student loan plan lowers costs for americans as they recover from the pandemic. Give everybody *** little more breathing. His plan would cancel $10,000 in federal suited debt for individuals with income below 125,000 *** year. Or households that make less than 250,000 *** year. And Pell Grant recipients could get 20 grand canceled. However, the plan was met with lawsuits filed by Republicans and conservative groups attempting to block it. What it does do is it increases inflationary pressures. It adds to the taxes that americans have to pay across the board. *** federal judge in texas ruled the plan overstepped the White House's Authority. *** federal appeals court in ST louis Missouri blocked the plan until *** ruling is made in wants to *** challenge from six Republican led states. It's pretty sad that we're arguing over forgiving people for wanting to have an education. Obviously that program would increase my chances to continue school and if it's like getting delayed and delayed, that's less encouraging the states argue the plan would irreparably harm their tax revenue and state run programs that service loans the biden administration appealed these cases to the Supreme Court, arguing it has the power to cancel large amounts of federal debt under the Heroes Act. *** 2003 law that allows the secretary of education to waive or modify the terms of federal student loans in times of war or national emergency. I want you all to hang in there and keep the faith and we believe we're gonna win that case. We're not gonna give up some worry. The plan will harm the economy and wonder who will pay for it. The Congressional Budget Office roughly estimates the forgiveness program could cost around $400 billion. The canceled loans would be added into the federal deficit, which measures how much the government exceeds its spending over its revenue, according to Forbes. Some experts are split on how significant the addition would be arguing the government has been running on *** deficit every year since 2001 without many adverse effects. To lower the deficit. The government either has to spend less or raise taxes, which means the general public could end up paying for it. However, President biden previously vowed not to increase income taxes on middle class americans. If the Supreme Court overturns the program, the Biden administration has proposed an alternative that updates their income-based repayment plan. The new plan could cut monthly payments in half from 10% of *** borrower's income to 5%. And the plan proposes forgiving debts after 10 years and payments for smaller loans. While the legal battle plays out, some financial experts say, to prepare for *** payment anyway. What I've been telling people to do is to actually pretend they're paying their loans. But instead of actually sending the money to the loan servicer to put it in some sort of interest bearing account. The student loan is *** big wait on people's shoulders and it's nice to have it reduced. There are other things that we'd like to get on with in our lives.
Supreme Court rejects Biden's plan to wipe away $400 billion in student loans
Updated: 10:53 AM EDT Jun 30, 2023
A sharply divided Supreme Court ruled Friday that the Biden administration overstepped its authority in trying to cancel or reduce student loans for millions of Americans.The 6-3 decision, with conservative justices in the majority, effectively killed the $400 billion plan, announced by President Joe Biden last year, and left borrowers on the hook for repayments that are expected to resume by late summer.The court held that the administration needs Congress' endorsement before undertaking so costly a program. The majority rejected arguments that a bipartisan 2003 law dealing with student loans, known as the HEROES Act, gave Biden the power he claimed.“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.Justice Elena Kagan wrote in a dissent, joined by the court’s two other liberals, that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.”Loan repayments are expected to resume by late August under a schedule initially set by the administration and included in the agreement to raise the debt ceiling. Payments have been on hold since the start of the coronavirus pandemic more than three years ago.The forgiveness program would have canceled $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would have had an additional $10,000 in debt forgiven.Twenty-six million people had applied for relief and 43 million would have been eligible, the administration said. The cost was estimated at $400 billion over 30 years.
A sharply divided Supreme Court ruled Friday that the Biden administration overstepped its authority in trying to cancel or reduce student loans for millions of Americans.
The 6-3 decision, with conservative justices in the majority, effectively killed the $400 billion plan, announced by President Joe Biden last year, and left borrowers on the hook for repayments that are expected to resume by late summer.
The court held that the administration needs Congress' endorsement before undertaking so costly a program. The majority rejected arguments that a bipartisan 2003 law dealing with student loans, known as the HEROES Act, gave Biden the power he claimed.
“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.
Justice Elena Kagan wrote in a dissent, joined by the court’s two other liberals, that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.”
Loan repayments are expected to resume by late August under a schedule initially set by the administration and included in the agreement to raise the debt ceiling. Payments have been on hold since the start of the coronavirus pandemic more than three years ago.
The forgiveness program would have canceled $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would have had an additional $10,000 in debt forgiven.
Twenty-six million people had applied for relief and 43 million would have been eligible, the administration said. The cost was estimated at $400 billion over 30 years.
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