Student Loan Forgiveness Updated
Updated: Mar 9
Get the tips from Experts
As you may be aware, the Supreme Court recently heard arguments regarding the legality of President Biden's plan to cancel $10-20k of debt for 43 million borrowers. Although the solicitor general, Elizabeth Prelogar, did a great job defending the plan, legal scholars are concerned that the conservative justices will strike it down.
It's important to note that the Court is only ruling on the $10-20k cancellation, and this won't affect other loan forgiveness programs like the Public Service Loan Forgiveness Program or Income-Driven Repayment Waiver.
After the arguments, the justices will cast tentative votes, and the senior justice in the majority will assign the opinion to a colleague or keep it themselves. Draft opinions, including concurrences and dissents, will be prepared and exchanged among the justices, and a decision will likely be issued in late June.
There were two separate cases challenging what was perceived as an unlawful overreach by the Biden administration, but the positions of both groups were not significantly different. In other news, the Public Service Loan Forgiveness Program saw a surge in forgiveness in December, with $7.6B granted to 99,597 borrowers. However, January's figures were underwhelming, with only $3.6B given to 45,318 borrowers. Despite significant processing efforts, over 650k forms were added to the to-be-processed pile.
Of the 4,557,261 forms submitted, only 51% were fully processed and granted forgiveness. Another 22.5% failed due to missing information, leaving over 1.2 million applications still in the queue for processing. These applications belong to 852,606 borrowers, with an average of 1.5 applications per person remaining.
Currently, 1,727,088 borrowers have at least some PSLF payments on their books, accounting for nearly $157B. Only 18.4% of all individuals with PSLF payments have received discharges, which accounts for just 14.5% of the total PSLF portfolio. MOHELA plans to finish processing the paperwork by May, but it may be an ambitious goal.
Subscribe here with the U.S. Department of Education on the latest Student loan updates
Last Update: March 9th, 2023