March 1, 2023
NEW YORK (AP) — The fate of President Joe Biden’s student loan forgiveness plan is up in the air after Supreme Court justices questioned whether his administration has the authority to broadly cancel federal student loans.
At stake is debt forgiveness for up to 43 million Americans. Nearly half could have their federal student debt wiped out entirely. But in hearing two cases challenging the plan, the Republican-appointed majority on the Supreme Court seemed likely to block it.
Already, about 26 million people have applied for debt forgiveness, and 16 million applications have been approved. However, because of court rulings, all the relief is on hold. The Education Department stopped taking applications in November because of legal challenges to the plan.
The Supreme Court will have the ultimate say on whether Biden can wipe out student loan debt, fulfilling a campaign pledge he made in 2020. Here’s what to know if you’re waiting for debt relief:
WHEN WILL THE SUPREME COURT DECIDE THE STUDENT LOANS CASES?
The Supreme Court heard arguments Tuesday, but there won’t be a decision for months. The court usually issues all of its decisions by the end of June.
WHO QUALIFIES FOR BIDEN’S STUDENT LOAN FORGIVENESS?
The plan Biden announced last August would cancel $10,000 in federal student loan debt for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically come from lower-income households, would receive an additional $10,000 in debt forgiveness, for a total of $20,000.
Federal student loans for both undergraduate and graduate school, including Graduate PLUS loans, can qualify for forgiveness under the plan.
Borrowers would qualify if their federal student loans were disbursed before July 1.
Under the plan, if you paid off your loans during the pandemic, you can request a refund and then apply for forgiveness.