Biden’s Student Loan Forgiveness Plan On Hold Till January 2023
In August 2022, President Joe Biden introduced the Student Loan Forgiveness Plan to provide low-to-middle-income students and families more breathing room to repay their loans following the economic recession caused by the COVID-19 pandemic.
This three-part plan aims to extend the student loan repayment pause till December 31, 2022, and forgive $10,000 for borrowers earning less than $125,000 as individuals or $250,000 as couples.
It also includes $20,000 in forgiveness for students who received Federal Pell Grants. The third part of the plan proposes a rule change to establish a new student debt repayment plan. This plan would enable borrowers to pay no more than 5% of their discretionary income.
However, in September 2022, attorneys from six Republican states – Iowa, Nebraska, South Carolina, Missouri, Kansas, and Arkansas – sued President Biden and his administration.
Although the lawsuit was thrown out, the GOP-led states filed an appeal to cancel hundreds of billions of dollars in student debt, which prompted the 8th US Circuit Court of Appeals to grant them an emergency petition – putting the Student Loan Forgiveness Plan on hold.
According to the Federal Reserve, nearly 9 million people (40% of borrowers) made at least one loan repayment between Q2 2020 and Q4 2021 – before the pandemic freeze took effect. Many of them have received refund checks despite the legal challenge and are using them to take care of their daily expenses.
If you repaid some or all of your student debt during the pandemic, you too can get your money back, as long as you’re eligible. Call us today at 832 295 3353 to speak to one of our qualified accountants to check your eligibility and file your refund claim.