President Joe Biden’s proposal to forgive tens of millions of Americans’ student loan debt is in jeopardy as the Supreme Court continues to mull over its legality.
A student loan expert predicts that the court may announce its ruling on Thursday, June 22, or at some other time between then and early July.
Lawsuits Implementation of Student Loan Forgiveness
Due to two lawsuits filed by GOP-backed organizations, the federal student loans forgiveness program has been delayed since October.
In one, six states argued that the legality of Biden’s relief would harm their states’ tax revenues and reduce the value of investments linked to student loans.
On the other, two student-loan borrowers did not qualify for the full $20,000 amount of relief.
The Biden administration has dismissed the state’s case, which has been made by Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina, and is considered to be the stronger of the two challenges, as being without merit, politically motivated, and without standing.
This is largely because MOHELA, one of the biggest student loans servicers in the country with a current contract with the federal government, was involved.
Read more: House Republicans Propose Comprehensive Student Loan Debt Plan
Transitioning Back To Regular Loan Repayment Terms
According to Politico, the lawsuit claims that MOHELA, which was included in the dispute by the state of Missouri, will lose money as a result of Joe Biden’s relief program because it will have fewer student loan accounts to manage, make less money, and find it harder to make the required payments to a state fund that aids its public colleges and universities.
According to a statement made to Politico by an Education Department spokeswoman, interest on student loans will start accruing again on September 1, 2023, and payments will begin to become due in October.
Although the current student loan pause extension originally ran through 60 days after June 30, 2023 — or whenever the lawsuits were settled — interest on student loans will resume on September 1, 2023.
Read more: Important Update: US Student Loan Interest To Restart In September