Millions left in limbo after pause on Biden loan cancellation
Even those who think they are ineligible are encouraged to apply.
BEAUMONT, Texas — The decision to temporarily block a program that would write off billions of dollars in federal student loans has sparked widespread concern.
Millions of people across the country have demanded President Joe Biden’s plan for student loan forgiveness. A ruling by an appeals court on Friday put relief on hold, leaving many wondering what will happen with their loan repayments.
Sharon Thibodeaux is the Director of Financial Aid at Lamar State College-Port Arthur. She estimates the decision to suspend relief has left 22 million borrowers waiting to see what it means for them financially.
“$10,000, $20,000 is enough for a lot of students,” Thibodeaux said.
SAFER: How to Apply for Federal Student Debt Relief
Thibodeaux believes a decision to cancel the debt will help people across the country.
“But, I think it’s great that it gives them some kind of relief, you know,” Thibodeau said. “If you can’t afford it all, it gives them relief for part of it.”
If the program is allowed to continue, those earning less than $125,000 a year or households with annual incomes below $250,000 would get $10,000 in student loan debt forgiven.
Pell Grant recipients who demonstrate greater financial need will get a $20,000 debt forgiveness. Loans used for undergraduate and graduate studies are also eligible.
The following people are eligible for relief if a person received the loan funds on or before June 30, 2022:
- William D. Ford Federal Direct Student Loans
- Loans from the Federal Family Education Loan Program
- Loans from the Federal Perkins Loan Program
- Stafford Loans
- Parent Plus Loans
- Graduate Loans Plus
- Perkins loans held
Despite the pause, Thibodeaux encourages borrowers to apply for the program. She even urges those who think they are ineligible to apply.
“Some people mistakenly believe they won’t qualify,” Thibodeaux said. “But, when you have a high income and you have a lot of people in the household, it helps lower the EFC so they can qualify for that.”
As to whether the rebate program will be back in action before Jan. 1, when loan repayments are expected to continue, the Biden administration has until Monday, Oct. 24, 2022 to submit its response. Americans can expect the Republican response on Tuesday.