![]() More than 1 million people default on their student loans every year, according to a report from the Urban Institute, a nonprofit research organization. ![]() The training necessary to obtain those licenses can be expensive, and many people are taking out student loans to cover the costs. Nurses, teachers, hair stylists and travel guides are just a few of the types of professionals who require a license. Today, that percentage has risen to more than 25%. workers were required to hold a license to practice their chosen profession. If people are unable to work in their chosen field - the one they went to school for and presumably took out loans to fund - how can they be expected to pay their debt?Īccording to the National Conference of State Legislatures, during the 1950s only 5% of U.S. In February, the Supreme Court heard arguments over Biden's broader student loan debt relief plan, which is a separate issue from the repayment pause.īiden's plan would cancel up to $20,000 of debt for anyone who received a Pell Grant to attend college and up to $10,000 for borrowers earning less than $125,000.A real Catch-22 of student loan debt exists in the 13 states with the ability to revoke a professional license in the case of student loan default. What's happening with the loan forgiveness plan? Even before Biden and McCarthy reached a deal, the Department of Education was readying the return to repayment.īack in November, the Biden administration said it was planning to end the pause at the end of August, or, at the latest, 60 days after the Supreme Court rules on Biden's broader student debt relief plan. The end of this pause will affect some 43 million borrowers who, collectively, owe over a trillion in student loan debt.īut, in effect, the new rules won't change much about the current loan landscape. Politics Debt limit deal claws back unspent COVID relief moneyĪnd this time, it looks like it would really be the end: The debt deal prohibits the education secretary from extending the pause on federal student loan payments without congressional approval. Their loans will accrue interest then as well. If the legislation passes, that means all federal student loan borrowers will be expected to start making payments again after August 29. ![]() The deal spells out when repayments resume: 60 days after June 30. What does the debt deal actually change for borrowers? The fate of that broader plan still rests in the hands of the Supreme Court. As part of a bipartisan compromise, the legislation includes a provision to restart student loan payments.īut, notably, it doesn't touch on another highly-watched issue for borrowers: Biden's plan to erase up to $20,000 in debt. On Wednesday, the House of Representatives will vote on a deal to avoid a historic government debt default by raising the nation's debt ceiling for roughly two years. Now, after five extensions, three years and two presidents, that pause looks set to end. ![]() Since March 2020, tens of millions of federal student loan borrowers have had the option to take a break from paying back their student loans without earning additional interest. Jemal Countess/Getty Images for People's Rally ![]() The court's ruling on President Biden's debt relief plan is expected in June or July. Student loan borrowers gather outside the Supreme Court building in February 2023. ![]()
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