CINCINNATI — For those looking to apply for the Federal Government’s Student Loan Debt Relief program, the application is gone.
It’s because a Federal Appeals Court issued a nationwide injunction, temporarily barring it from taking effect.
The decision came after another federal court ruled the whole program was illegal, and while debt relief is on hold, payments resume in January with interest rates continuing to increase at a historic pace.
For many, it came as a shock, like Malina Hensley. She has always wanted to become a teacher.
“I wanted to be a teacher a long time ago,” said Hensley. “So that’s why right out of college I went to school for that.”
But after graduation in 2010, she realized just how costly paying for school truly was. Since then she’s been working hard to pay off $64,000 in school loans.
“I’ve been paying so long I feel like it’s been consuming my life,” she said. “Every single tax return time I’m like omg all this money is going to go to my student loans.”
And that’s why she was so excited when she found out about Biden administration’s Student Loan Debt Relief Program. It’s a program that would forgive up to $20,000 worth of student loan if you met the qualifications.
“Once they announced that, I was like, oh now I don’t have to worry about this anymore,” she said. “I don’t have to keep paying this off.”
But now that the program is at a standstill, the program is no longer accepting applications.
As of right now, no matter where debt relief stands, loan repayments for everyone resume in January with the interest rates continuing to climb as part of a federal reserve effort to tamper inflation, which just compounds the cost for borrowers even planning to get just partial relief on their loans.
“$20,000 for most people with a 6% interest rate — that’s like $300 something a month,” said Christian Cox, an investment adviser with Primerica. “So that is a car payment. That is something bigger, and for those people, this was going to be a blessing and now it’s paused.”
In order to offset the costs, he suggests that holding off on spending extra money.
“Cutting subscriptions,” said Cox. “I know a lot of times people pay for their Christmas stuff or gift stuff with debt. Maybe don’t do that this year because you won’t want those payments in January.
Despite the plan being temporarily placed on hold, Hensley said she’s still optimistic that hear loans will eventually be forgiven.
“I’m hoping that someone, somewhere, is like this is wrong,” said Hensley. “We’re going to fix this and make it right.”
