Student Debt Relief Plan Borrower Owing $101K Has No Hope For Biden’s New Loan Forgiveness Plan

Jarrett, a Student Debt Relief Plan borrower whose loan balance is over $101,000, does not see himself being able to pay off the amount. Despite U.S. President Biden’s new plans on loan forgiveness, Jarrett still does not feel too keen on the program.

At the end of the month of June, the Supreme Court decided on striking down U.S. President Joe Biden’s Student Debt Relief Plan which intends to cancel up to $20,000 in student loans for student borrowers. The Student Debt Relief Plan is under the Heroes Act of 2003 which authorized the Secretary of Education to modify or waive student loans in connection with a national emergency like the COVID-19 pandemic.

Nonetheless, an article in Yahoo News states that after the Supreme Court struck down the Student Debt Relief Plan, Biden announced new plans for the loan forgiveness program. Reports say the Department of Education will pursue the use of the Higher Education Act of 1965 to attempt to provide relief other than the Student Debt Relief Plan to millions of student borrowers.

However, the Education Department stated that the process would take longer than the Student Debt Relief Plan. In addition, student borrowers may have to resume making payments without any relief in October. Fortunately, the department announced a 12-month “on-ramp” period to provide the borrowers with leeway once the payments resume. This suggests that borrowers who fail to make payments will not be reported to any credit agency, although interest will still accumulate on the loan balances.

READ ALSO: $400 Billion Student Debt Relief Plan Defended By White House Ahead Of Supreme Court Ruling

Student Debt Relief Plan Borrower Has No Hope

According to an article in Business Insider, Jarrett, who requested for his last name to be concealed for privacy, claims that he does not feel too keen on Biden’s new plans for the Student Debt Relief Plan. Jarrett admitted to placing his initial student loan balance of around $60,000 on forbearance.

However, during the time he was not settling any payment, interest was still accumulating which surged his loan balance to around $80,000. To date, Jarrett’s balance is over $101,000 which he does not see himself being able to pay off.

READ ALSO: Carceral Debt: Difference From Federal, Student Debt; Must They Be Forgiven?