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Aubrey Bertram, a staff attorney at Wild Montana, had around two and a half years left of payments before her $247,804 federal student loan balance would be excused under the Public Service Loan Forgiveness program.
Many federal student loan borrowers, including Bertram, are stuck in a frustrating limbo due to Republican-led legal challenges that blocked the Biden administration's new repayment plan, leaving them frozen in a forbearance that does not bring them closer to debt forgiveness.
The recent U.S. appeals court decision blocked the Biden administration's SAVE plan and the loan forgiveness component under other income-driven repayment plans, impacting borrowers' progress towards debt cancellation.
Borrowers affected by the legal challenges have the option to switch out of the blocked SAVE plan and into other income-driven repayment plans like Income-Based Repayment, Pay As You Earn, and Income-Contingent Repayment to continue their journey towards debt forgiveness.
Scott Buchanan, executive director of the Student Loan Servicing Alliance, highlighted that automatic forgiveness after 20 or 25 years is not currently available under Income-Contingent Repayment and Pay As You Earn plans due to court questioning of their permissibility under statute.
Source: CNBC
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