What a mess. In August 2022, the Biden Administration announced its plan to forgive some student loans. An application was opened and took less than 5 minutes to complete. It was the most straightforward application I have ever filled out. But then, the politicians and judicial system got in its way.
A Pause in Student Debt Relief Plan
On Thursday, November 10th, a federal justice judge, Mark Pittman, in Texas declared the president’s plan to forgive student debt unconstitutional. As a result, the Department of Education has suspended taking applications. I am not sure what it means for those who did not get a chance to apply. Additionally, the Eight Circuit Court of Appeals is considering a lawsuit filed by representatives from Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina.
Student Loan Repayment Extension Ends Soon
So now what? Student loan repayment is slated to restart after December 31st, 2022. Come January 1st, 2023, the student loan bill will begin, and those impacted by the pandemic will have no choice but to decide between paying for basic needs or their student loans. The debt relief, which would have provided some relief on the daily accrued interest, is not an option now. Approximately 26 million borrowers have applied for student debt relief and hoped to receive that financial relief. So, what can the Administration do now?
Band-Aid Support
As the Biden Administration is working to overturn the orders to stop the student debt relief, they can continue extending the repayment or pause interests from being accrued as people work to pay off their loans.
Most of my friends across all party lines agree that predatory student loan interest needs to be addressed. If the Administration can figure out a way to address the interest rates on each student loan account or have a flat interest rate applied across all student loans, private and public, that would be a start. Additionally, financial literacy or education regarding the impact of student loans should be required for students that apply for and are awarded student loans. This can include terms of repayment, interest, consolidation, refinance, etc., and the options available depending on what profession a student decides to pursue. This is just a start. However, student debt forgiveness is still the best option for people who are struggling to make their payments or have been preyed by lenders charging high interest.
Will student debt relief truly come to reality? It is uncertain right now. First, however, we need student loan reform. Students need protection. The government-all branches need to come to a consensus on an approach to help relieve the suffering of many of us plagued by this disease. We don’t need rhetoric or band-aid approaches. We need relief.
For now, we wait.
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