Currently, there is $1.78 trillion in outstanding student loan debt, and regrettably, for tens of millions of Americans, paying off loans is a necessary rite of passage.
Many of those college graduates regret the financial choices they made early in life after spending years or even decades paying off their debt, especially when their aspirations and ambitions of a successful job haven’t come true.
Student Loan Forgiveness on Trial
Millions of borrowers would have had no outstanding student loan debt after the action, and it would have significantly reduced the amount of debt that some students still owed.
Several observers are skeptical about the prospects for student loan forgiveness in its current form because that plan has attracted litigation from opponents that are currently being reviewed by the Supreme Court.
Nevertheless, there are a number of ways for borrowers to come out on top, and they aren’t all dependent on a favorable ruling from the country’s highest court.
The administration may potentially make a second attempt using a different statutory provision even if the Supreme Court rejects the Biden scheme.
When the Department of Education used a statute connected to national emergencies as their justification for taking action, some senators who support student loan forgiveness weren’t happy with the decision, preferring instead broader-based laws that offer more specific authority.
Read more: Bristol Myers Challenges US Government’s Medicare Drug Price Negotiation Plan
The Biden Administration’s Repayment Reforms
Few people anticipate that the Supreme Court will support the Biden administration in the ongoing legal battles over the student loan forgiveness program.
The Supreme Court justices’ questions strongly suggested that they thought the executive branch had exceeded its constitutional authority and that the legislative branch needed to give more precise authorization.
Furthermore, although borrowers are undoubtedly drawn to the possibility of an immediate $10,000–$20,000 debt write-down, alternative policies may have the same long-term impact.
The Biden administration, for instance, wants to put in place brand-new, income-driven repayment schemes that will lower the amount that borrowers must pay.
With this Department of Education effort, modest borrowers’ repayment terms would be shortened to 10 years from 20 to 25 years, and many borrowers would experience a reduction in payments of up to 50%.
Read more: Poland As A Chip Manufacturing Hub: Intel Commits $4.6 Billion For New Plant
