The Supreme Court is scheduled to rule on President Joe Biden’s proposal to cancel student loan debt before the end of June, bringing much-needed clarity to millions of worried borrowers.
At the end of February, the court heard two legal objections to the debt forgiveness proposal; it is anticipated that its ruling would be made by early July, just before the start of the summer break.
The Supreme Court Proposal for Student Loan Forgiveness
Whether the president has the power to enact such a broad program is one of the important issues before the justices.
In Joe Biden’s plan, which may cost $400 billion, millions of debtors would have their student debt forgiven up to a maximum of $20,000.
Critics claim that the administration is abusing the authority that the Heroes Act of 2003 gives the US. During times of national emergency, the Secretary of Education has the authority to alter student loans.
Opponents claim that the statute, which was passed in the wake of the September 11 terrorist attacks, was not intended to be a general debt relief clause that the administration could use at whim.
The ruling of the Supreme Court has important ramifications for borrowers, many of whom are in precarious financial situations.
For other people, choosing between paying off student debts and covering essential expenses like rent, groceries, and medical costs has become a matter of life and death.
Read more: Creative Alternatives If Supreme Court Rejects Student Loan Forgiveness
Understanding the Scale of Student Debt Cancellation
The Congressional Budget Office predicts that Biden’s plan could eliminate $400 billion in federal student debt, bringing the total amount of outstanding student loan debt in the country down from $1.7 trillion to $1.3 trillion if every qualified borrower applied for relief.
A third of those who have federal student loans—roughly 14 million people—would have all of their outstanding sums erased under the president’s plan.
A further 37 million people would be qualified for partial loan cancellation, with amounts ranging from $20,000 for those who got a Pell Grant while in college to $10,000 for everyone else.
The potential impact that the ruling could have on the financial security of countless people and families across the country is still in the spotlight as borrowers wait for the Supreme Court’s verdict.
Read more: Escape The Grip Of Student Loan: Actionable Approaches To Repaying $28,950 In 5 Years