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Tuesday, September 26, 2023


Debt relief ruling: Future uncertain for borrowers

Jose Gonzalez-Campelo/The Cougar

The U.S. Supreme Court struck down President Joe Biden’s student debt relief program two weeks ago. The program would have provided approximately $430 billion in debt relief for roughly 40 million Americans.

The decision was split 6-3, with all conservatives in the majority. Biden’s plan would have used the 2003 HEROs Act to waive federal loans for a one-time deal.  The court’s decision stated Biden had exceeded his legal authority with this program. 

“Individuals with private loans were not eligible for loan forgiveness,” said Alex Badas, an assistant political science professor at UH. “Individuals who received Pell Grants would receive up to $20,000 in loan forgiveness, while those who did not receive Pell Grants would receive up to $10,000 in loan forgiveness.”

Approximately  26 million borrowers applied and 16 million were approved for debt relief under this program. The court’s decision means that anyone who was approved for the loans will not get any of their loans canceled. 

“As someone with student loans, I am not happy with the decision,” said Abbie Culver, a public administration graduate student. “I think the legal reason behind the decision is unsound and that the court was probably swayed by different public officials and interests groups that were fighting the forgiveness program.”

Last year, the Biden administration announced a three-part student debt relief plan. The plan was intended to provide relief to working families in the wake of the economic downturn caused by the COVID-19 pandemic, according to the White House. 

The debt relief program was one of the administration’s campaign promises. 

“The decision doesn’t directly affect me much, as I have been avoiding loans like the plague so far, but it does reaffirm my fear of getting stuck with mountains of student loan debt,” said computer science junior Ryan Camp.   

In the wake of the court’s decision, Biden announced that the administration will use the new Saving on a Valuable Education to help borrowers with their loans. 

“I’m hoping Biden will use executive powers through the higher education act to push this plan through,” Culver said. “10,000-20,000 per borrower isn’t the perfect solution but it’s a baby step.”

Biden also announced he will be directing the Education Department to come up with a new forgiveness plan under the Higher Education Act, promising that the new proposal would be legally sound but would require patience on behalf of borrowers.

“President Biden will try to forgive student loans under the Higher Education Act of 1965,” Badas said. “The act grants the U.S. Department of Education the ability to compromise, waive or release loans. It is still uncertain what President Biden’s full plan will look like and if as many individuals will be affected and whether the amounts forgiven will be the same.” 

After years of pause on student loans due to the COVID-19 pandemic, repayments will resume in October. Interest is set to resume accumulating on existing loans Sept. 1, according to the Department of Education. 

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