Federal debt forgiveness for millions of US students is at risk

First modification:

The US Supreme Court has raised questions about whether the White House may have overreached its duties by presenting a relief plan that seeks to forgive, in whole or in part, the federal debt of more than 40 million students. We explain it.

Of the nine justices that the United States Supreme Court has, it depends on President Joe Biden fulfilling one of his main campaign promises: the forgiveness of federal student debts for millions of students.

The plan presented in August was left up in the air, after some of the magistrates questioned whether the administration has the authority to cancel these loans or if, on the contrary, it is illegally exceeding its functions.

“I am sure that we are on the right side of the law. I am not sure of the outcome of the decision,” Biden told reporters at the White House on Wednesday, March 1.

Around 26 million people have already applied for their debt forgiveness and 16 million have been approved. However, court challenges have them on hold and since November, the Department of Education has stopped accepting applications.

The student debt forgiveness plan is for more than 40 million students.
The student debt forgiveness plan is for more than 40 million students. © France 24

What is the student debt forgiveness project?

Those who earn less than $125,000 per year or whose household earns less than $250,000 in income, could enjoy the cancellation of up to $10,000 in federal student debt. Pell Grant recipients, who typically come from low-income households, would receive an additional $10,000.

The plan, which does not apply to private loans, grants relief even to those who have finished paying their obligation during the pandemic, since they can request a refund and then the respective forgiveness.

Biden’s plan to cancel student debt would cost the federal government about $400 billion over the next 30 years, according to the most recent estimates from the Congressional Budget Office.

The Supreme Court will have the last word and, although its decision may take months, it is expected to be made before June. Although for Biden it will not be easy to convince a court dominated 6-3 by conservative judges.

With AP, Reuters

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Written by Editor TLN

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