It’s been months since the Supreme Court struck down President Joe Biden's federal student loan forgiveness plan. Despite this setback, the Department of Education has launched a series of initiatives, offering relief to millions of borrowers across the nation and there could be more relief on the horizon.
Ray Callahan, who has been paying off a loan for his daughter's education for nearly a decade, is among the many Americans grappling with student loan debt. He owes about $6,000.
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“I wasn't surprised based on the political climate, but I was a little disappointed,” Callahan said.
According to the Biden administration, 43 million Americans could have benefited from the forgiveness plan. Federal student loan repayments resumed in October, after the pandemic payment pause.
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The Department of Education has since approved a whopping $127 billion in relief for almost 3.6 million individuals and implemented an income-driven repayment plan, potentially reducing or even eliminating payments for some borrowers.
"The Biden administration announced sort of a preliminary look at what their next form of broad student loan forgiveness will be,” said Jacob Channel, a student loan expert at LendingTree.
This new plan focuses on specific groups, including those with balances exceeding the original borrowed amount, folks who have been repaying their loans for 25 years or more, individuals with debt from career training programs resulting in unreasonable debt or insufficient earnings, and those eligible for existing forgiveness programs but have not applied.
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The department is also considering extending relief to those facing financial hardships not currently addressed by the loan system.
“So right now, it seems like it's a much more narrow plan than what we saw with the plan that was struck down by the Supreme Court, which was very broad,” Channel said, cautioning about potential hurdles. “Given the fact the Supreme Court seems pretty hostile toward the idea of student loan forgiveness being done via executive action or action directly from the Department of Education without congressional approval through some sort of bill that was passed.
A date for when these changes will take effect has not been announced. The Biden Administration says it’s using its power under the Higher Education Act to offer relief to those most affected by federal student loan debt.
