WASHINGTON — When President Biden announced his plan to cancel up to $20,000 in federal student loans for some borrowers last August, he framed it as part of a multipronged approach to ease the burden on loan holders and prevent a wave of defaults.
Now, in the final months of the federal student loan repayment pause, it’s clear much of that safety net will not materialize.
The Supreme Court on Friday blocked Biden’s debt forgiveness plan, and his administration is still finalizing an overhaul of a program that allows borrowers to pay only a small portion of their discretionary income toward student loans. Several third-party companies contracted by the Department of Education to collect debts have laid off staff, cut call center hours or stopped handling student loans.
