The student loan forgiveness plan block was extended by a federal appeals court judge on Monday. (Stock)
The block on President Joe Biden student loan cancellation plan was extended on Monday as courts assess its legality.
The 8th United States Circuit Court of Appeals, based in St. Louis issued an injunction preventing the Department of Education from eliminating student loan debt based on Biden’s executive order in August.
The decision is part of a lawsuit filed by Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. These six states argue that Biden’s student debt relief plan threatens future tax revenue. Previously, a federal judge rejected those arguments, but the states appealed the ruling.
And that’s not the only legal battle Biden’s student debt forgiveness plan faces. In a separate decision on Thursday, a federal judge in Texas ruled the plan “illegal” in a lawsuit brought by two borrowers partially or wholly ineligible for debt cancellation.
If you have private student loans, you probably won’t qualify for any type of federal student debt relief. However, you can refinance your private student loans to lower your interest rate and monthly payments. Visit Credible to compare different student lenders, without affecting your credit score.
TEXAS FEDERAL JUDGE BLOCKS BIDEN’S STUDENT LOAN FORGIVENESS
Who qualifies for Biden’s student loan forgiveness?
While the student loan forgiveness plan is currently stalled, the Biden administration continues to fight the decision in court.
The plan applies to eligible federal student loans backed by the Department of Education and provides forgiveness of up to $10,000 in student debt per borrower or up to $20,000 in student loans for grant recipients Pel. To be eligible, borrowers cannot earn more than $125,000 per year if single or $250,000 for married couples.
“The skyrocketing cumulative federal student loan debt — $1.6 trillion and growing for more than 45 million borrowers — is a significant burden on America’s middle class,” the White House said. said in a press release. “Middle-class borrowers struggle with high monthly payments and bloated balances that prevent them from building wealth, such as buying a home, setting aside money for retirement, and starting small businesses.”
If you’re having trouble repaying your student loan, you might consider refinancing your private student loans to lower your interest rate and monthly payments. Visit Credible to compare interest rates to find one that works for you.
BIDEN CANCEL $10,000 OF STUDENT LOAN DEBT PER BORROWER – WHAT TO KNOW
Can you still apply for student loan forgiveness?
Federal student loan borrowers could previously apply for student loan forgiveness online. However, the Department of Education stopped taking requests after the Texas judge ruled the plan was an “unconstitutional exercise of congressional legislative power.”
A message about the Federal Student Aid website says that “The courts have issued orders blocking our student debt relief program. Therefore, at this time, we are not accepting applications. We are seeking to overturn these orders.”
However, the ministry said it would keep applications already submitted.
If you have private student loans, you will not be eligible for federal student debt forgiveness. But you can potentially lower your interest rate and monthly payments by refinancing your private loans. Visit Credible to speak with a student loan expert and see if this option is right for you.
MANY BORROWERS OBTAINED STUDENT LOANS ANTICIPATING DEBT FORGIVENESS, SURVEY SAYS
The Future of Student Debt Relief
As Biden’s student debt relief plan faces legal challenges, advocates have called for an extension of the payment freeze.
At the height of the COVID-19 pandemic, a section of the CARES Act froze payments for some federal student loans and reduced interest rates to 0%. After several extensions, the payment break is due to expire on December 31.
But some advocates have asked for another extension as courts assess student loan forgiveness.
“We call on President Biden to protect borrowers during this uncertain time, by extending the student loan payment pause until all legal hurdles are removed and debts are forgiven,” said the Student Debt Crisis Center. (SDCC). said in a press release.
If you have private student loans, you may not qualify for debt forgiveness. But you can refinance your student loans to lower your interest rate. Visit Credible to talk to a student loan refinance professional to see if this option is right for you.
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.
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