After SCOTUS strikes down Student Loan Forgiveness program, some students say they'll suffer hardship
CHICAGO (CBS) -- The U.S. Supreme Court on Friday struck down President Joe Biden's Student Loan Forgiveness plan, ruling the president overstepped his authority in trying to cancel or reduce student loans.
This means 40 million Americans who stood to have thousands of dollars in debt wiped away will now have to pay up.
As CBS 2's Marissa Perlman reported, some students were banking on the debt forgiveness – and could have cleared up $20,000 of their debt. With an unstable job market, some say they are now scrambling for solutions.
A sharply divided Supreme Court ruled in a 6-3 decision that the Biden administration overstepped its authority in trying to cancel or reduce student loans. This leaves borrowers on the hook for payments that are expected to resume in October.
Friday was orientation day for students at the University of Illinois Chicago. It was the same day students were slapped with news that they will need to find new ways to start paying back student loans.
"For me, I have to immediately think about - as soon as I graduate, I need to start working," said Carla Magpyo.
Magpyo, who was born and raised in the Philippines, already works full time on top of being a student. She worries about making her $10,000 student loan payment come fall.
Meanwhile, Nia Jordan was not expecting she would have to pay back the $15,000 loan she took out to go to UIC so soon.
"I find it crazy that the government doesn't want to help out students, as they should," Jordan said. "I mean, it's not our fault we're in the predicament to have to take out loans."
Amiah Blackwell just finished her freshman year at the University of Michigan. But the nation's highest court's ruling is also causing the Chicago native to stress during her summer break.
"I am worried," Blackwell told CBS 2's Charlie De Mar. "The idea of having debt at just 19 years old is very scary, and I don't really know how I'm going to deal with it."
Payments have been on hold since the start of the COVID-19 pandemic more than the years ago. The Biden administration Student Loan Forgiveness program would have canceled $10,000 in student debt for those making less than $125,000, or households with less than $250,000 in income.
The plan would have allowed up to $20,000 in loan forgiveness for some.
"I didn't give borrowers false hope," President Biden said, "but the Republicans snatched away the hope they were given. And it's real - real hope."
A handful of Republican-led states sued to block Mr. Biden's program – including Iowa.
"I don't think it's right that people who chose not to go to college have to pay other people's loans," Iowa Attorney General Brenna Bird.
In Illinois alone, more than 1 million people applied or were deemed eligible for relief.
"That $20,000 really would have done a lot for me," said Blackwell. "I know my mom is still paying her student loans - so this is just another stress."
CBS News Business Analyst Jill Schlesinger says borrowers need to reach out now to their loan servicer to find out how much they owe and about their payback plan.
"If you're under some pressure because your circumstances have changed, you should really start think about, 'Are any other loan options that make sense for me?'" Schlesinger said.
She said whatever student loan borrowers' interest rate was three years ago will be the same rate come Oct. 1. But as the students venture into that unsteady job market, they had a message for SCOTUS.
"You make it harder for us," said Magpyo. "It's just going to be harder for everybody."
President Biden issued a statement denouncing the ruling:
<blockquote>"I believe that the Court's decision to strike down our student debt relief plan is wrong.
"But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families. My Administration will continue to work to bring the promise of higher education to every American."</blockquote>
The U.S. Department of Education says even before loan repayments resume in October, interest will begin accruing in September.
