The Supreme Court heard oral arguments this week from both proponents and critics of President Joe Biden’s plan to cancel student loan.
The nine justices examined witnesses from both sides of two distinct lawsuits in order to establish whether the plaintiffs had the legal right to file a claim and whether President Biden was authorized to provide this kind of relief.
Student Loan Cancellation And Discharge Programs
Student loan borrowers stand to lose the most immediately, but the government may stand to gain more from the high court’s decision and justification.
In essence, both cancellation and forgiveness signify that the borrower won’t be required to make any payments because of their employment.
While the borrower is freed from repayment responsibilities by a student loan discharge, this is only the case if the decision was made because of a complete or permanent disability.
Based on the borrower’s income, plans for repayment are made, modifying his payments as necessary.
Many options for the cancellation or discharge of student loan are listed below. Employees of charitable or governmental organizations who take out direct loans are eligible for Public Service Loan Forgiveness.
Read more: SSI beneficiaries may claim Student Earned Income Exclusion; Here’s how!
Direct Loans And FFEL Program loans
If they have worked as full-time educators for five complete and consecutive academic years, they are eligible for a $17,500 forgiveness of their Direct Loans and FFEL Program loans.
One option for Perkins Loans, FFEL Program Loans, and Direct Loans is Closed School Discharge. Some students can be eligible for student loan forgiveness if the institution closed while they were still enrolled or not long after they graduated.
Only Federal Perkins Loans are available for cancellation and discharge; under specific conditions, borrowers may also be let go due to employment or volunteerism.
Direct Loans, FFEL Program Loans, and Perkins Loans are all eligible for this option. The requirement that the borrower is disabled affects both the service requirement of the Teacher Education Assistance for College and Higher Education (TEACH) Grant and the borrower’s eligibility for this discharge.
Discharge Due to Death, even while the bankruptcy discharge process does not start right away after filing, it does so far less frequently than a discharge due to death.
Discharge in Bankruptcy, although filing for bankruptcy does not immediately begin the discharge procedure, this happens considerably less frequently than the discharge due to death.
Read more: Student loan forgiveness update: Key progress in Supreme Courts’ arguments