The Supreme Court of the United States is examining a lawsuit from several Republican states that seek to block Joe Biden’s student debt relief plan from this February 28. Several million Americans are already benefiting from this signature measure of the Biden term, with student loans reduced or even canceled based on income.
The Supreme Court will hear two arguments seeking to block Joe Biden’s decision to forgive up to $20,000 in student debt for US citizens. The plan announced in August 2022 would cancel $10,000 in federal student loan debt for those earning less than $125,000 or families earning less than $250,000 a year.
43 million Americans
The relief could be up to $20,000 for Pell Grant recipients. However, some red states managed to get an appeals court to block the measure on the grounds of the high cost that this meant for the taxpayer, among other things.
The ruling will not be known this week, but the magistrates’ comments will give an indication of how the conservative-leaning Court will vote next June.
If maintained, the measure will affect 43 million Americans, of whom 26 have already applied and 16 million have already been approved for forgiveness. For many who are at risk of delinquency or default due to the difficulties caused by the Covid-19 pandemic and the inflationary crisis, aid is key to survival.
“Avoid reaching the point of default”
In fact, the 53% of students says his financial stability depends on debt relief. Situation that is even more difficult for Latinos who do not have the support of generational wealth like that of the white community.
Precisely, the default on the debt is one of the biggest risks for the economy, highlights a Honduran law student at American University: “I was paying my loans after graduating from college, and paid about $500 a month. Thank God I had a job to make these payments, but for people who don’t have a job, I think it would be better if they lower what they have to pay monthly a bit and avoid reaching the point of default,” the student told Radio International France from Washington.
Student debt in the United States amounts to 1.7 trillion dollars, the second largest after mortgage debt. A default fueled by a lack of state aid would be catastrophic for a US economy trying to recover.
