Former college students and graduates all over the country are waiting to hear back about student loan forgiveness. While some have even received approvals for their applications, they may not see the money soon. The Biden v Nebraska student loan lawsuit has put things to a halt for the time being. But what is this lawsuit and what does the future of student loans look like?
What is the Biden v Nebraska Lawsuit?
After President Biden announced the student loan debt relief program, Nebraska and six other states challenged the program stating it violates the separation of powers and the Administrative Procedure Act.
An emergency injunction was set into motion on November 14th, with the Biden Administration appealing to the U.S. Supreme Court on November 18th. On December 1st, the U.S. Supreme Court agreed to hear the case.
The actual oral argument will not be heard until February 28th, with a decision being made after that date.
What Does Student Loan Forgiveness Look Like For the Future?
There are a few different aspects of student loan forgiveness and repayment that the Nebraska student loan lawsuit will affect in the coming months and years.
First, while student loan repayment has been suspended, repayments will begin again in 2023. Payments will be due either 60 days after the debt forgiveness litigation ends or 60 days after June 30, 2023, whichever comes first.
Second, a new income-driven repayment plan may soon be on the horizon. Students could have the opportunity to pay back their loans at rates of 5% of their income. And those who have $12,000 or less after 10 years of paying back the debt could have the remaining amount forgiven.
Third, the Department of Education (DoE) has stated it will be looking into further programs that will help borrowers. With the new year actually comes some new changes that lower the requirements needed to qualify for debt relief through the Public Service Loan Forgiveness Program. In addition, the DoE is also taking another look at defaults on student loans to see where improvements can be made to lower the consequences for borrowers.
The news surrounding student loan debt forgiveness is constantly changing. Those with student loan debt should keep a close eye on the upcoming Supreme Court case to see where they stand regarding their finances.
