- 1440 Daily Digest
SCOTUS to Decide Loan Forgiveness
The Supreme Court announced yesterday it would hear challenges to the Biden administration's student loan forgiveness plan. The order left in place a lower court's decision to pause the program's implementation while the legal process unfolds, leaving its fate undecided until at least after February when the high court will hear the case.
The initial plan canceled up to $10K in federal student loan debt for borrowers under certain income thresholds ($20K for Pell Grant recipients) while extending a freeze on repayments (see details). Opponents of the proposal argue the government exceeded its authority and circumvented Congress in using the 2003 HEROES Act to justify the program. Analysts suggest the effort may cost $300B, or around 18% of the $1.6T in outstanding student loan debt.
Close to 75% of those with federal student loan debt owe more than $10K, while almost two-thirds of borrowers owe less than $40K (see data).