US Supreme Court Examines Program for Forgiveness of Student Loan Debt

The arguments on President Joe Biden’s plan to reduce student loan debt were heard by the US Supreme Court on Tuesday. Millions of debtors stand to gain from the court’s ruling in the form of loan reductions or forgiveness. In August of last year, the Biden administration made the debt forgiveness scheme public. For those making less than $125,000 annually or for households making less than $250,000 annually, it would erase $10,000 in federal student loan debt. Debt forgiveness increased to $10,000 for recipients of Pell Grants, a type of special financing available to students with greater financial need.

If student loans were disbursed prior to July 1st of last year, then they qualify for the program. 43 million borrowers would be eligible for some debt relief under the idea. As per the Biden administration, around 20 million people might see their debt completely disappear. According to the White House, 26 million people have requested debt relief. Before the scheme was suspended by the courts, the relief of about 16 million people had already been approved. The program is expected to cost roughly $400 billion over the next thirty years, according to the Congressional Budget Office.

Two arguments against the idea are being heard by the Supreme Court. One consists of six states that are run by Republicans. In the other, two pupils have filed a lawsuit. The action including the states of Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina was dismissed by a lower court. The court ruled that since the states benefited from the program and could not legitimately protest it, they could not do so. The U.S. Court of Appeals decided to halt the program’s operations after the states filed an appeal of the ruling. Subsequently, the Supreme Court decided to take the case.

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