Disappointment Strikes Borrowers Hoping for Student Loan Forgiveness After Supreme Court Ruling

Whitney Jean Alim, a 27-year-old educator residing in Chicago, had high hopes of purchasing a house sooner thanks to President Joe Biden’s student loan cancellation plan. The plan would have cut her $40,000 debt, accrued from college and a master’s degree, in half.

However, on Friday, the U.S. Supreme Court delivered a blow to the forgiveness plan, shattering the dreams of Alim and countless other borrowers who were relying on their student debt being reduced or eliminated.

Alim expressed her disappointment, saying, “Literally this morning, I felt like: ‘Damn, I just lost $20,000.'” She learned about the court’s decision from a reporter.

The ruling brought bitterness and frustration for borrowers nationwide, even for those who anticipated the plan’s rejection by the conservative justices. Some struggled to fend off feelings of despair.

Under the student loan forgiveness program, individuals earning less than $125,000 would have seen $10,000 of their debt eliminated. Households with earnings below $250,000 were also eligible, and Pell Grant recipients would have received an additional $10,000 in relief. According to the administration, a staggering 43 million borrowers would have qualified.

Conservative opponents of the debt relief program objected to its estimated cost of $400 billion over 30 years, arguing that it was unfair to those who had already repaid their debt or had not pursued higher education. Supporters of Biden’s plan emphasized its potential to boost the economy and narrow the racial wealth gap, as borrowers of color disproportionately hold significant student debt.

Following the ruling, President Biden announced a 12-month grace period to assist borrowers who may face difficulties when loan payments resume. He also intends to pursue a new plan for loan cancellation, though with a different legal justification than the one invalidated by the Supreme Court. The specifics of these new plans are not yet entirely clear.

Brittany Bell Surratt from Washington, D.C., expressed her lack of surprise at the court’s decision. Nevertheless, she felt disheartened about the future for Black Americans, including herself, especially given the court’s ruling against affirmative action in higher education the day prior.

“We have experienced systemic discrimination in so many ways, and this decision aligns with the ruling on affirmative action,” she stated. “It’s a deliberate and conscious choice.”

Bell Surratt, 37, had paused her loan payments during the pandemic while saving for her 17-year-old son’s upcoming college education. Initially owing around $47,000, her current debt stands at over $65,000 due to accumulated interest. When payments resume on October 1, she anticipates having to allocate approximately $800 per month toward her loans. “That’s equivalent to a mortgage in many places.”

Nicholas Richard-Thompson, a communications coordinator for the mayor’s office in Aurora, Illinois, felt defeated when he received a news alert about the Supreme Court’s ruling on student loans. He had nearly $100,000 in debt to finance his education. Richard-Thompson, as one of the younger children of older parents, stated that he could not have pursued higher education without taking out loans.

He attributed the recent string of Supreme Court decisions undermining progress for women, LGBTQ+ communities, and people of color to the Democratic Party’s unwillingness to take a bold stance on these issues.

“These consequences stem from their politics over the past 20 years,” Richard-Thompson asserted. “Unless there is a significant departure, things will only continue to worsen.”

Alim lamented that the degrees she and her peers financed through loans did not yield the expected returns. “I just think that education in America is not really worth it. It’s not becoming worth it,” she remarked.

When student loan repayments resume in the fall, Alim will have to allocate $500 per month toward her loans. She believes that this money could have been used to save for a home.

Elizabeth Shoby, a 33-year-old artist residing in New York City, expressed how the court’s decision deprived her family of much-needed financial relief. Biden’s plan would have forgiven $10,000 of the $70,000 debt she accrued while pursuing a graduate degree in fine arts.

Kerrianne Troesch, a rising junior majoring in communications at Pennsylvania Western University, would have had nearly $10,000 of her student loan debt canceled from her freshman year alone. Troesch, 20, had contemplated not attending college at all but felt that her only alternative would be minimum-wage jobs.

“Regardless of your decision, you’re going to accumulate debt,” she lamented.

The education team at Big Big News is supported by the Carnegie Corporation of New York. The AP is solely responsible for all content. ___

Contributors to this report include Cheyanne Mumphrey in Phoenix, Claire Savage in Chicago, and Collin Binkley in Washington, D.C. Reporting was conducted by Ma in Washington and Lurye in New Orleans.

Frequently Asked Questions (FAQs) about student loan forgiveness

More about student loan forgiveness

• Supreme Court ruling on student loan forgiveness
• President Biden’s student loan cancellation plan
• Arguments against the debt relief program
• Implications of the ruling on borrowers
• President Biden’s response to the ruling