Biden is suing the Supreme Court for student loan forgiveness
The Justice Department is asking the US Supreme Court to reinstate President Joe Biden’s federal student loan relief plan after two judges blocked it, saying it could take weeks or months to reach a final decision on it whether the widespread cancellation can continue. And while that’s good news for borrowers eligible for relief, most just want to know for sure what’s going to happen to their January payments.
Then the almost three-year pause in federal loan payments and interest accrual ends. But amid confusion over the future of debt relief, some borrowers say there’s no point in resuming payments with $10,000 to $20,000 of forgiveness left on the table.
That relief could significantly alter borrowers’ payments month-to-month — or eliminate them entirely.
“More than anything, I wish I could have a good answer one way or another so I could start developing a plan,” says Patrick Stifter, a 27-year-old optometrist on $179,000 in government student loans . “Optimism is currently in short supply. I am pragmatic and prepare for the worst.”
Like the millions of other borrowers who qualify for debt relief under Biden administration rules, Stifter and his wife began creating financial plans based on his receiving $10,000 in debt relief. Now, after a federal judge in Texas and an appeals court in Missouri blocked the program, they must await answers about what their future holds.
Many are calling on Biden to at least extend the payment pause again until the lawsuits are settled. Other borrowers are confused about whether to cancel or hold requests for reimbursements of payments made during the pandemic.
Stifter says it’s unfortunate that the program has been so politicized and may not be helping the people it was intended for.
“Most people… just want a solution, sooner rather than later,” says the Colorado resident. “They don’t want to know on December 25 that they have to start paying off their loans on January 1.”
What’s also frustrating, Stifter says, is that there’s no central information point to get information on 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 vacate the Court of Appeals’ injunction. The Supreme Court has refused to block the relief plan on several occasions, but these decisions covered different cases.
“The plan looks like it’s going to face an uphill battle given how conservative many of the country’s courts — particularly the Supreme Court — are,” Jacob Channel, senior economist at LendingTree, previously said wealth.
The Biden administration stopped accepting requests for relief last week after the Texas judge initially blocked the program. It said over 26 million people applied for relief and over 16 million were approved before the program was shut down.
“We strongly believe that the Biden-Harris Student Debt Relief Plan is legitimate and necessary to give borrowers and working families breathing room as they recover from the pandemic and ensure they are successful when repayments resume education minister, Miguel Cardona, said in a statement.
“Amid efforts to block our debt relief program, we are not resigning.”
For the time being, Stifter can only wait and see. He considered refinancing his loans with a private lender, but if the Biden administration extended the payment pause and 0% interest rate, he’d rather benefit from it for a few more months. Every day seems to cost him money.
“One to two percent changes in interest rates have a huge impact on my life,” he says. “Regardless of the answer, it would be nice to have an end date for this.”
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