President Joe Biden’s plan to cancel Student Loans on a part of the American student population was met with heavy opposition. The entire plan is on standby as they go through legal challenges that were actually expected. The moratorium on federal student loan payments was extended one more time with interest included. These payments were previously set to resume on January 1 but the president already came out in public to say that this pause was being extended to no later than January 30, 2023.
This play is to offer the Supreme Court some time to hear the case with details during this period of time. Biden wanted to set the record straight about what is really going on, Republican opposition are the ones challenging these student loan forgiveness plans. President Biden said this: “It isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit.” This is definitely a set back but a minor one, according to the president himself.
Who does this student loan forgiveness plan help?
According to the information shared by The White House, this Student Loan Forgiveness plan was aimed at more than 45 million Americans who carried a total of $1.6 trillion in student loans. A nonpartisan Congressional Budget Office estimated that this will cost $400 billion over a 30-year period. Since May 2020, student loan payments have been on hold and they were supposed to resume in September that year. However, the moratorium was extended another three times by former president Donald Trump and four more times by Biden.
According to reports, these student loan payments are set to resume 60 days after legal challenges have been resolved. If an agreement isn’t reached by June 30, these payments would still resume 30 days later, which is August 29 of 2023. The paused types of student loans are the direct federal student loans, the Federal Family Educaion Loan program, Federal Perkins Loans, Defaulted FFEL loans, and Defaulted Health Education Assistance Loans.
