Student Loan Borrowers Lose Faith in Biden’s Forgiveness Plan

For student loan borrowers, President Joe Biden’s forgiveness plan seemed too good to be true. And now they fear that maybe it was.

Earlier this month, a federal judge in Texas struck down the program, the latest blow in a series of legal challenges that have upended the initiative. Borrowers are currently unable to submit applications to have up to $20,000 forgiven, and they’re losing hope that the debt relief will ever happen.

The Department of Education previously warned of a wave of defaults when payments restart, especially as stubbornly high inflation, punishing housing costs and a growing number of job cuts cascade through the economy. Although the White House announced Tuesday that the pause in payments will be extended through June 30, financial advisors say borrowers should prepare to face those monthly bills again.

Many aren’t sure how they’ll afford it.

“It’s been a rollercoaster,” said Kayla Walker. “I’ve written it off now. I feel like it’s unlikely to happen.”

The 26-year-old from Virginia has about $40,000 in federal student debt and another $7,000 in private loans. She applied for forgiveness when the application opened, but cynically views the plan as “an election point” that politicians used to garner votes.