WASHINGTON — The Supreme Court met Tuesday to hear two cases challenging President Joe Biden’s student loan forgiveness plan. At stake is forgiveness of up to $20,000 in debt for more than 40 million Americans.
Nearly half of those people could have their federal student debt wiped out entirely.
But the Supreme Court will now have the ultimate say on whether Biden can wipe out that student loan debt. No matter what's decided by the court, when the ruling comes down could factor in to when borrowers have to resume payments.
When do student loan payments resume?
During the pandemic, two presidential administrations paused payments for those holding federal student loans. The pause has been extended to as late as this summer.
Payments are set to resume, along with the accrual of interest, 60 days after the court cases are resolved. For example, if legal issues remain at the end of June, payments would restart at the end of August. If the Supreme Court issues a ruling in March, repayment could restart as early as May or June.
If the cases haven’t been resolved by June 30, payments are currently scheduled to start 60 days after that - which would be in late August.
When will the Supreme Court decide the student loans case?
There won't be a decision for months. The court usually issues all of its decisions by the end of June or sometimes early July.
Who qualifies for Biden's student loan forgiveness?
The plan Biden announced last August would cancel $10,000 in federal student loan debt for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically come from lower-income households, would receive an additional $10,000 in debt forgiveness, for a total of $20,000.
Federal student loans taken out for both undergraduate and graduate school, including Graduate PLUS loans, can qualify for forgiveness under the plan.
Borrowers qualify if their federal student loans were disbursed before July 1.