CENTRAL, Texas — For a year, student loans have been the topic of discussion with more than half of the nation in debt.
Last summer, President Biden had promised to cancel up to $20,000 in student debt for 43 million borrowers through his student debt relief program. 3.8 million of those borrowers were Texans, all set to for their debt to be cleared.
If you visit Studentaid.gov--an official government office of the U.S. Department of Education--it has a banner that now reads: “The Supreme Court issued a decision blocking us from moving forward with our one-time student debt relief plan."
16 million Americans were already approved for what would be a financial reset, but some Republican-led states challenged the action in court.
After a battle in the supreme court, on June 30, they ruled to put the debt cancellation plan to a stop.
Biden later give his own thoughts on the ruling, stating, "I didn't give borrowers false hope but the Republicans snatched away the hope that was given. I think the court's decision to strike down my student debt relief program was a mistake, was wrong. The decision has closed one path, now we're gonna pursue another."
But what will this new path look like?
Enter Fresh Start, a program where borrowers can apply for a repayment plan based on your income. For borrowers with defaulted loans the program allows you to get out of it and removes that blemish from your credit report. Additionally, it reduces your required payments to no more than five percent of your income.
October is when monthly student payments will resume, but you can sign up for a fresh start now by contacting your local loan provider now.
Additionally, in the midst of rising interest rates, experts are urging borrowers to make more than the minimum payments on their debts.
"If you make the minimum payment on your student debt, you're going to be carrying their debt for a very long time," said CNBC personal finance editor, Sharon Epperson.
Biden's second repayment plan is called 'On-Ramp', a 12-month repayment plan that protects borrowers from incurring more penalities.
As you work to get your student debt finances in order, a new rule called 'Secure 2.0 Act', which will kick off in 2024, will soon provide a student loan matching contribution program. This will allow employers to make contributions to your retirement plan and help pay off your student debt.
"It's good for the economy. It's good for the country. It's gonna be good for you," said President Biden.
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