Biden’s Student Loan Forgiveness Plan Gets Temporally Blocked

What Happened?

South Carolina, Kansas, Iowa, Missouri, Nebraska, and Arkansas all filed a lawsuit stating that the Loan Forgiveness Plan would hurt their state, and affect loan companies. Because of that, the Federal Court has temporally blocked president Biden’s loan forgiveness plan. The Friday block happened less than a week before the plan went out to the public. Although the plan has stopped temporally, Biden still encourages people to submit their applications. More than 22 million people have already signed up.

U.S. Eighth Circuit Court of appeals temporally stopped it, which took in multiple lawsuits that could override the forgiveness plan.  22 out of 28 Republican Governors have signed a letter to the President requesting him to withdraw his loan forgiveness plan. The governors said that it would affect them, and the forgiveness would only cause higher inflation. It is to be assumed that Biden disregarded this letter since he is still trying to bring this plan to life.

What is the Student Loan Forgiveness Plan?

It’s a three-part plan to help those who can’t afford to pay their school loans. The President and the Vice President made this plan. It is said to help thousands of people. It is supposed to forgive up to $20,000 of loans. Students or graduates are able to apply until December 3, 2023. To begin with, ever since Biden became president, those with college or university loans were able to stop paying.  The pandemic was the one to freeze payments, it wasn’t until this year that payments were resumed.

To go back into paying the loans, the president proposed the Student Loan Forgiveness Plan. Up to $20,000 will be provided by the U.S. Department of Education. The department will give $10,000 in debt cancelation to non-Pell Grant Recipients. Loan forgiveness can also be given to those people whose income is lower than $250,000. For example, if someone owes $17,000 and is a Pell Grant Recipient, then they will be given that $17,000 instead of the full $20,000.

Aside from the student loan forgiveness plan, Biden has other plans wants to do:

• Forgive loans after 10 years of paying no matter what is left (rather than after 20 years)
• Require no one to pay more than 5% of their monthly income (rather than paying 10% of their income monthly)

Be Aware

There are many scammers trying to take advantage of this. Many have reported receiving calls and emails saying they are part of the government and are eligible to apply for the loan. They might also email you, call you, or text you saying that they can help but in return, they will charge a small fee. This is false. To apply for or to finalize a loan, you will never have to pay.

Although many think the line or process to get the loan forgiveness plan is long, the President has said that the wait will be no longer than 6 to 8 months.

What else is happening?

There are a lot of things that the President has stated he wants to change, or improve this year (2022).these are some:

• Coronavirus, and its case numbers.
• Building the U.S. into a better place.
• Improve the rights of voters.
• Improving the U.S. inflation.
• Improving foreign connections and trading.
• Improve/make laws about gun control.
• Decrease the climate change that is going on and rapidly getting worse to this day.
• Improving processes, i.e.: Obtaining a U.S passport as an American citizen, or getting important papers from the government much faster.

As of right now, no one knows when the Student Loan Forgiveness Plan will be able to resume. Many think it will be a long way, but be able to come back. Most believe it will be dismissed because of the high amount of disagreements about it.

By Adriana Castelan

Sources:

Reuters: U.S appeals court temporarily blocks Biden’s student loan forgiveness plan

ABC News: Federal appeals court temporarily blocks Biden’s student debt forgiveness program

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Inset Image courtesy of Steven Green Flickr page- Creative Commons License