Biden's student-loan forgiveness plan could be blocked or delayed, expert warns

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Mark Kantrowitz said that legal challenges to the loan-forgiveness program announced by President Joe Biden in August are expected and could present a real obstacle. MWMoneyFestival

A warning for those anticipating at least a portion of their student loans being forgiven: It’s not necessarily a done deal.

President Biden’s plan calls for $10,000 in student-loan forgiveness for people earning up to $125,000, with $10,000 in additional loan relief for borrowers who received a Pell grant while in college. Still, Kantrowitz said that while there’s opposition to Biden’s plan, especially from Republicans, there may not be a group that has the proper legal standing to file a lawsuit — that is, a group needs to have experienced direct economic harm in order to make its case.

If Biden’s plan does go through, Kantrowitz said that many borrowers will still need to be prepared to file an application — Kantrowitz said it should be coming out in early October — and attest they meet the income qualifications. The Biden Administration has said that borrowers should fill the form out by Nov. 15 if they want their debt canceled before payments are scheduled to resume at the start of next year.

 

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