Updated at 4:55 p.m. to include President Joe Biden's reaction to the Supreme Court's decision.
The Supreme Court has rejected the Biden Administration’s plan to forgive $400 billion in student debt, eliciting reactions from borrowers in Central Pennsylvania and nationwide.
Biden introduced the plan last August, but lawsuits quickly put it on hold. Under the plan, most borrowers with federal student loans would have had $10,000 forgiven. Pell Grant recipients like Andrea Taylor would have had $20,000 forgiven.
“It’s disappointing because when that came out, I was so excited about what I was gonna be able to do without having to pay back,” Taylor said.
Taylor is a Saint Francis University graduate who lives in Altoona. Because of the payment pause and getting bachelor’s and master’s degrees, Taylor hasn’t had to make a payment in five years. She says she’s fortunate that her car payment ends right before student loan repayments restart.
“If that wasn’t happening, I don’t know what I would do,” Taylor said.
Willis Hershey graduated from Penn State in 2021. Even though there has been a pause on student loan repayments since his graduation, Hershey has been taking money out of every paycheck to go toward his loans.
“Debt terrifies me. As a full-time student I’d be working 25 to 35 hours a week at a restaurant to just try to keep my debt as low as possible,” Hershey said.
Hershey said he thinks it would have been fair for the government to cancel some student loan debt, since many businesses saw relief during the pandemic in the form of PPP loans. But he also understands the perspective of those who didn’t get a degree and instead went to a trade school or straight to work.
“They made the decision not to do that for financial reasons, and then the kids that went to college anyway are getting a bail out. I wish there could be a more holistic way of infusing money into working class people,” Hershey said.
The Education Department has announced loan repayments will resume in October, but interest will start to accrue in September.
In response to the Supreme Court decision, President Biden said “this fight isn’t over” and announced new plans for borrowers. One of these plans includes a new path to give student debt relief as quickly as possible through the Higher Education Act. An income-driven repayment plan, Saving on A Valuable Education (SAVE), cuts monthly payments to zero dollars for millions of low-income borrowers.
Education Secretary Miguel Cardona said SAVE will save all other borrowers at least $1,000 dollars per year and “stop runaway interest that leaves borrowers owing more than their initial loan.”
