Federal student loan payments are going on pause again for millions of Americans for at least the next six months.
The pause affects 8 million American borrowers and is coming into effect because of delays on student loan forgiveness programs the Biden administration promised.
Republican-led states filed a lawsuit “that has barred the Biden administration from moving forward,” The Washington Post reported. “Until an injunction can reached, the payments and interest are on pause.”
1. Who does this change impact?
The people who can utilize the pause are those enrolled in the White House’s “Saving on a Valuable Education” (SAVE) plan — a plan launched last year to “provide borrowers with lower monthly payments and a faster path to loan cancellation,” according to the Post.
Since last fall, more than eight million people enrolled in the program and 400,000 have had their student loan debt forgiven, per CBS News.
2. What other programs are there for student loan forgiveness?
The SAVE program isn’t the only federal program out there seeking to provide debt relief. There are several, including:
- Public Service Loan Forgiveness (PSLF): This program is for borrowers employed by the government or not-for-profit organizations and must have completed an equivalent of 120 monthly payments and be working full-time in order to qualify.
- Teacher Loan Forgiveness: This is for full-time teachers in low-income schools and borrowers must have taught for five consecutive years in order to receive up to $17,500 in forgiveness, according to New York magazine.
- Income-Driven Repayment (IDR) Plan Forgiveness: Under this plan, borrowers get a reduced payment depending on discretionary income, Forbes reported.
- Perkins Loan Cancellation and Discharge: The subsidized loans are for borrowers who work in a public service position and must have completed one year in the public service position, per Nerd Wallet.
There are many others, including niche programs and state-specific initiatives that can help provide relief as well like the National Health Service Corps Loan Repayment Program, which provides loan repayment assistance to primary care clinicians working in areas with a shortage of healthcare professionals, per New York magazine.
3. How does student loan forgiveness work?
The funding for the student loan forgiveness programs is complicated, but according to Yahoo Finance, who will foot the bill? — “Future taxpayers.”
Biden hasn’t proposed new revenue streams to support paying off the loans, and it “will cost the government $559 billion in foregone revenue over the coming decade,” Yahoo Finance proposed.
4. How much student loan debt has been forgiven under the Biden administration?
The White House has provided $175 billion in debt relief for nearly five million borrowers so far, according to Nerd Wallet.
5. What have the current candidates said about student loan forgiveness?
The two major presidential candidates vary on their stance on student loan forgiveness programs. Here’s a peek into what they’ve said in the past.
Former President Donald Trump:
- A “massive win”: Trump said after the Supreme Court initially blocked Biden’s student loan forgiveness plan that it was a “massive win,” according to Time.
- At the June 2023 convention for Moms for Liberty, Trump said passing the plan would have been “very, very unfair to the millions and millions of people who have paid their debt through hard work,” per the Post.
Vice-President Kamala Harris:
- “Proud”: Harris said she was “proud” of the money delivered to student debt relief through the Biden tenure. “I will continue our work to lower costs, make higher education more affordable, and relieve the burden of student debt. I am fully committed to doing what is necessary to build an economy that works for every American,” she said in a statement.
- “Before President Biden and I took office, only 7,000 people had received Public Service Loan Forgiveness. We fixed the program, and now over 1 million public servants — from firefighters and nurses, to service members and teachers — have had their student debt canceled,” Harris said, per The Hill.