Justice Department asks U.S. Supreme Court to reinstate President Joe Biden’s federal student loan forgiveness plan after two judges blocked it, saying it could take weeks or years months before a final decision is made on the possibility of moving forward. And while that’s good news for borrowers who qualify for relief, most just want to know for sure what will happen to their payments in January.
That’s when the nearly three-year pause on federal loan repayments and interest accumulation is expected to end. But with confusion surrounding the future of the debt relief program, some borrowers say it doesn’t make sense to restart payments while a $10,000 to $20,000 discount is still on the table.
This amount of relief could dramatically change borrowers’ payments from month to month, or even eliminate them altogether.
“More than anything, I wish I could get a good answer one way or another so I could start making a plan,” says Patrick Stifter, a 27-year-old optometrist with $179,000 in federal student loans. “Optimism is rare right now. Just by being pragmatic, I prepare for the worst.
Like the millions of other borrowers who are eligible for debt relief under Biden administration rules, Stifter and his wife began making financial plans based on the fact that he was receiving $10,000 from relief. Now, after a federal judge in Texas and an appeals court in Missouri blocked the program, they await answers about what their future holds.
Many are calling on Biden to at least extend the payment break until the lawsuits are settled. Other borrowers are unsure whether to cancel claims for payments made during the pandemic or hang in there.
Stifter says it’s unfortunate the program has become so politicized and may not be helping the people it was intended for.
“Most people… just want a fix, and as soon as possible,” the Colorado resident says. “They don’t want to know on December 25 that they have to start repaying their loans on January 1.”
Also frustrating, Stifter says, is that there is no central clearinghouse to go to to find out the status of forgiveness efforts.
“I just Google student loans every few days and see where we are,” he says.
The Justice Department filed a brief with the Supreme Court to overturn the appeals court’s injunction. The Supreme Court has already refused to block the relief plan on several occasions, but these decisions were related to different cases.
“The plan appears to face an uphill battle given the degree of conservatism in many courts across the country, particularly the Supreme Court,” said Jacob Channel, senior economist at LendingTree. Fortune.
The Biden administration stopped accepting relief requests last week after a Texas judge blocked the program for the first time. It says more than 26 million people applied for help and more than 16 million were approved before the program was shut down.
“We strongly believe that the Biden-Harris student debt relief plan is legal and necessary to give borrowers and working families respite as they recover from the pandemic and to ensure their success when repayment restarts. ,” Education Secretary Miguel Cardona said in a statement.
“Amid efforts to block our debt relief program, we are not backing down.”
For now, all Stifter can do is wait. He considered refinancing his loans with a private lender, but if the Biden administration extended the payment pause and the 0% interest rate, he would prefer to have it for a few more months. Every day seems to cost him money.
“Interest rate changes of 1% to 2% have a huge impact on my life,” he says. “Whatever the answer, it would be nice to have an end date.”
. Biden asks a discount loan student supreme court