In American households, the topic of student loan payment continues to be the main topic of discussion. With the cost of higher education rising every year, those from wealthy families may soon be able to afford an undergraduate degree.
As more people seek a college education to gain access to the greatest jobs available in the industry, it is estimated that over 44 million Americans currently owe a combined amount of 1.76 trillion dollars in student loans.
Several well-known politicians have endorsed the implementation of some type of loan forgiveness in order to address the current issue, which is that the United States is currently experiencing a cost-of-living crisis and the economy is on the verge of entering a recession.
In reality, the Student Debt Relief Plan, which was targeted at forgiving up to 10,000 dollars for those earning 125,000 dollars or less year, was introduced in 2022 by the current American president, Joe Biden. People who qualified but also got Pell Grants were eligible for up to $20,000 in repayment.
However, opponents of student loan forgiveness argued that the initiative violated executive authority and chose to file a number of challenges, which led the US Supreme Court to temporarily halt the initiative while it examined the case.
What is Student Debt Relief Plan
The White House revealed this week that more than 16 million people have received approval for debt relief under President Biden’s plan for student loan forgiveness in the less than four weeks that the application was open.
While the Supreme Court reviews a legal challenge submitted by a coalition of states led by the GOP, the program is now on pause. Until the court’s decision, which is anticipated this summer, millions of debtors will stay in uncertainty.
More than 61% of the 26 million people who applied or were automatically qualified based on information provided to the Department of Education had their applications fully accepted and sent to loan servicers for discharge, according to the new data, which breaks down eligibility by state.
According to the White House, more than 40 million people would be eligible for the debt relief program, which was created to help people who were struggling with debt due to the pandemic.
Read More: Student Loan Repayment Pause: Extended?
What impact will this have on student loan payments?
The COVID-19 pandemic prompted then-US President Donald Trump to announce a halt to student loan payments in 2020. Since then, the order has been repeatedly renewed, with President Biden extending the forbearance through 2023.
But now that the epidemic has passed, borrowers might once more be required to begin paying back their student loans as of June 30, 2023, an important date to keep in mind.
The current period of forbearance shall terminate on the date set forth above, and the debtors shall commence making payments 60 days thereafter.