Although the Supreme Court today struck down President Biden’s student loan forgiveness plan, ending a program and would have provided $10,000 and $20,000 lump-sum forgiveness to 42 million Americans, that decision has no bearing on teachers’ eligibility for Public Service Loan Forgiveness, nor does it in any way impact the Income Driven Repayment (IDR) Adjustment opportunity that ends on December 31, 2023.
Additionally, in remarks this afternoon, Biden said that his administration is moving forward as quickly as possible to enact a different student debt relief plan under the Higher Education Act. He urged borrowers who can to resume federal student loan repayments this fall. Payments are due starting in October and interest will start accruing September 1.
Biden added, however, that the Department of Education won’t refer borrowers who are not able to pay their federal student loan bills to credit agencies for a 12 month period, temporarily removing the threat of default.
“This Supreme Court decision fails to recognize the realities faced by student loan borrowers today,” said NEA President Becky Pringle. “Despite our disappointment, we will continue to work with the Biden Administration to cancel student debt and create an education system that is affordable and accessible to all.”
Opportunities for student debt relief
Public Service Loan Forgiveness (PSLF) is available to every federal student loan borrower who works for a qualifying employer, including public schools. After teachers have made 120 payments on Direct loans though an eligible repayment plan, their entire remaining federal student loan balance can be forgiven.
The IDR Adjustment opportunity that lasts until New Year’s allows federal loan holders to receive retroactive credit for payments made on ineligible loans or through an ineligible repayment plan. “In essence, it’s like last year’s waiver in that it clears away two of the biggest obstacles that prevented CEA members from receiving the loan forgiveness that had been promised,” says Martin Lynch, director of education at Cambridge Credit Counseling.
A CEA Member Benefits partner, Cambridge Credit Counseling offers free webinars and free counseling to every CEA member looking to take advantage of the IDR payment adjustment and qualify for PSLF, including members who may still be far short of 120 payments. Subscribe to the CEA Daily to be notified about upcoming webinars from Cambridge Credit Counseling.
When it comes to private student loans, Connecticut teachers working in Alliance Districts are eligible for the Alliance District Teacher Loan Subsidy Program, which offers an interest rate subsidy when you refinance existing non-federal student loans. Teachers who have applied so far have been able to reduce their loan rates by an average of 4.96%. Subsidized rates range from 0.75% to 2.49% across 5, 10, and 15 year repayment terms. Find out more.
