If Supreme Court OKs Biden student loan plan, here’s how many SC borrowers would be freed from debt
The fate of student loan debt for potentially hundreds of thousands of South Carolinians could soon be decided as the Supreme Court begins hearing oral arguments over President Joe Biden’s forgiveness plan Tuesday.
The Supreme Court will consider two legal challenges to Biden’s plan to cancel as much as $20,000 in student debt for borrowers. One challenge comes from six GOP-led states, including South Carolina. The other challenge is backed by the Job Creators Network Foundation, a conservative advocacy group.
According to estimates from the White House, 681,100 South Carolina residents are eligible for federal student loan forgiveness. That’s about 13.1% of the state’s population.
A Congressional Budget Office analysis estimates the Biden plan would cost about $400 billion.
The Biden administration had to take down the loan forgiveness application portal last year because of the legal challenges. However, the U.S. Department of Education has approved more than 16 million people for student loan forgiveness.
The Biden Administration expects that “over 40 million borrowers are eligible for its student debt relief plan, and nearly 20 million borrowers could see their entire remaining balance discharged.” Also, nearly 90% of the debt relief would benefit people earning less than $75,000 a year, the Biden administration says.
The Biden administration has already eliminated $18.5 billion in loans for more than 700,000 Americans by temporarily expanding or streamlining existing forgiveness programs.
Here are other ways for people to get student loan forgiveness.
- The Public Service Loan Forgiveness (PSLF) program will forgive your loans after 10 years of working in public service. And in October 2021, this program was temporarily expanded to include borrowers who didn’t previously qualify — though you’ll need to act before Oct. 31, 2022.
- The Teacher Loan Forgiveness program offers up to $17,500 in student loan cancellation after five years of working in an eligible school.
- Most states also offer loan repayment assistance programs to borrowers in certain occupations, typically those who work in high-need or underserved areas. Plus, more and more employers are offering student loan assistance as an employee benefit.
- Finally, you could get your student loan balance forgiven after 20 or 25 years on an income-driven repayment plan. While you usually have to pay taxes on the forgiven amount, the government has waived this tax bill until at least Jan. 1, 2026, with the American Rescue Plan Act of 2021.
