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Student Debt Relief Plan Blocked By Supreme Court, Here’s What Biden Offers As New Plan

Student Debt Relief Plan [Photo: Alaska Beacon]
Student Debt Relief Plan [Photo: Alaska Beacon]

The Supreme Court blocked the U.S. President’s Student Debt Relief Plan but fortunately, Biden is offering a few other plans. Biden announced an “on-ramp” grant, the Higher Education Act, and the revision of REPAYE.

Biden on Student Debt Relief Plan [Photo: NBC News]

Biden on Student Debt Relief Plan [Photo: NBC News]

“On-Ramp” Grant

According to Pesce, the suspension of monthly payments because of the COVID-19 pandemic will end on September 1. The first loan repayment is due sometime in October. Fortunately, despite the blockage of the Student Debt Relief Plan, U.S. President Joe Biden announced that the administration will provide a year of an “on-ramp” grant to student borrowers who may have difficulty making repayments. This indicates that even if a student borrower fails to settle a monthly payment between October 1, 2018 and September 30, 2024, they will not be deemed delinquent.

Higher Education Act

On June 30, the White House announced its authority to forgive loans under the Higher Education Act after the Student Debt Relief Plan was blocked. Nonetheless, this strategy could take at least a few months to achieve and its success is at risk of legal challenges. Furthermore, the scope and the number of individuals who could benefit from this initiative are not yet known.

READ ALSO: 7,000 Student Loan Borrowers Can Get $3.5 Million Refund From A Debt Relief Company; Check It Here!

SAVE Repayment

According to Edney, the administration of Biden intends to revise its existing income-driven plan called “REPAYE” and rename it “SAVE” after the Student Debt Relief Plan was blocked. The initial proposal regarding this initiative was released by the Department of Education last January. However, in comparison to the original REPAYE plan, the SAVE plan aims to reduce the payments of undergraduate borrowers from 10% to 5% of their discretionary income and 15% of other repayment plans.

READ ALSO: Biden’s Student Loan Relief: Plan Appeals To Young Unemployed Snackers, Sen. Ted Cruz Says

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