Student loan borrowers praise Biden’s plan

Student loan borrowers gather at the Supreme Court in Washington, DC, the evening before the court hears two cases over the White House student loan relief plan.

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On the night before the day Supreme Court To be set to hear oral arguments about the Biden administration student debt relief planAmanda Smitley sat outside the court on an aluminum blanket, umbrella in hand.

She doesn’t know when she plans to spend the night outside the supreme court that it would rain, but she was not discouraged.

“I’m feeling great,” said Smitley, 20, who has about $10,000 in assets. student debt as a sophomore at PennWest California. She’ll have to work harder if she wants to fulfill her hopes of graduating and becoming a high school history teacher.

“I really, really care about student debt, not even just for myself,” Smitley said. “I want to live in a world where my future students and maybe future kids won’t have to worry about being in debt thousands of dollars just because they want to continue their education.”

Student loan borrower Amanda Smitley, 20, joined student loan borrowers gathered at the Supreme Court on February 27, 2023, the night before the court heard the two parole cases. stuff for student loans.

Annie Nova | CNBC

The court will hear two cases against pardon

Despite the frigid weather, borrowers gathered outside the Supreme Court on Monday to demonstrate in support of the Biden administration’s pardon plan. More than 35 million student loan Borrowers can benefit from this policy and have up to $20,000 their debt has been forgiven. If implemented, the estimated $400 billion in debt would be wiped out.

But the show has been delayed since the fall, when a federal appeals court panel in St. Louis issued a temporary restraining order. The Supreme Court upheld that ban because it considered challenges to the plan, and government in its own way stopped accepting applications for the program in November.

The Supreme Court is on trial two separate cases Tuesday about Biden’s debt forgiveness plan.

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The first petition, originally filed by six Republican-led states in federal court in Missouri, claims that the Biden administration has no legal authority to cancel student loan debt without prior authorization. permission of parliament.

The second lawsuit, filed by Myra Brown and Alexander Taylor in U.S. District Court in Texas, argues that they and other members of the public were improperly denied their right under federal procedure to equal justice. official discussion of the debt relief plan, which may have affected their debt reduction plan. design before it takes effect.

The Job Creators Network, a conservative advocacy group, is backing the plaintiffs in that case.

Experts say the debt relief scheme is likely to be ruled by a majority of six court judges as illegal if the bloc finds that one or more of the plaintiffs in the two cases has the necessary legal right, to call is standing, to file a lawsuit challenging the program.

‘For many, this is life and death’

Student loan borrower John Runningen was also among those planning to sleep outside the Supreme Court on Monday night. He attended Minnesota Community and Technical College and owed $5,000.

That debt made his life more difficult.

“It keeps me from buying a car, leaving my parents’ house and helping my parents deal with the stress of their bills,” says Runningen, 22.

As a first-generation college student, he hopes to break the cycle of poverty and help his parents. His stepfather is a farmer and his mother works at a gas station. However, with a $175 monthly student loan, he won’t be able to help them.

Student loan borrowers gather outside the US Supreme Court on February 27, 2023, the night before the court hears two cases for student loan forgiveness.

Annie Nova | CNBC

“For some people, that may not seem like much, but for rural communities or the poor, it will be the difference between whether I can feed my family or not. can pay the electricity bill,” said Runningen.

Within three weeks of the registration process opening, the Biden administration reported that more than 26 million won everybody filed for relief, with 16 million requests approved.

There is no precedent in U.S. history for the kind of comprehensive debt relief the White House has promised to implement, although consumer advocates point out that large corporations and banks have been approved by the government. relief after going through their own crises. And they say that canceling a large portion of education debt is needed to free many struggling borrowers. a broken loan system.

Student loan borrowers had difficulty repaying their loans before Covid. According to Kantrowitz’s estimates, only about half of borrowers were repaid in 2019. A quarter — or more than 10 million people — are in arrears or default, and the rest have already applied. apply for temporary relief for troubled borrowers, such as forbearance or forbearance.

These dismal numbers have led to comparisons with mortgage crisis of 2008 and pressure Biden to bail out.

“For many people, this is life and death,” said Thomas Gokey, co-founder of the organization. collective debt, a national union of debtors. “What’s at stake is being forced to choose between paying off student loans or being able to buy groceries, pay rent and pay medical bills.”


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