Student Loan Forgiveness Update Supreme Court Ruling

Supreme Court Strikes Down Biden's Student Loan Forgiveness Plan

Key Takeaways for Borrowers and the Future of Student Loan Debt

June 30, 2023 | 4:00 PM

Washington, D.C. - In a significant ruling, the Supreme Court has struck down President Biden's plan to discharge federal student loan debt for tens of millions of Americans.

The court, in a 6-3 decision, ruled that the Biden administration overstepped its authority in creating the plan without congressional approval. Approximately 400 billion in student debt was expected to be forgiven under the plan, which was seen as a major campaign pledge of President Biden.

The court's decision leaves borrowers with outstanding federal student loans facing the resumption of payments in the fall. Roughly 1 in 8 Americans will be affected by this ruling.

Five Key Takeaways for Borrowers: 1. Restart of Loan Payments: Student loan payments will resume as scheduled in the fall. 2. No Automatic Forgiveness: The Biden administration's forgiveness plan has been invalidated, and there is no automatic forgiveness of student loans at this time. 3. Explore Other Options: Borrowers should consider exploring other options for loan forgiveness, such as Public Service Loan Forgiveness or income-driven repayment plans. 4. Contact Loan Servicers: Borrowers should contact their loan servicers to discuss their repayment options and potential new repayment plans. 5. Stay Informed: Borrowers should monitor the situation and any potential future developments related to student loan forgiveness. Implications for the Future of Student Loan Debt: The Supreme Court's ruling has cast doubt on the legality of future executive actions related to student loan forgiveness. It remains to be seen whether Congress will take action to address the issue of student loan debt.

The decision will likely lead to ongoing debates and further legal challenges over the government's authority to forgive student debt.