For student loan borrowers, President Joe Biden’s forgiveness plan seemed too good to be true. And now they fear that maybe it was. 

Earlier this month, a federal judge in Texas struck down the program, the latest blow in a series of legal challenges that have upended the initiative. Borrowers are currently unable to submit applications to have up to $20,000 forgiven, and with the almost three-year freeze on required loan payments scheduled to end Dec. 31, they’re losing hope that the debt relief will ever happen. 

When payments restart, a wave of defaults could soon follow, especially as stubbornly high inflation, punishing housing costs and a growing number of job cuts cascade through the economy. Although the White House is reportedly considering an extension of the moratorium, no concrete announcement has been made, and financial advisors say borrowers should prepare to face those monthly bills again.

Many aren’t sure how they’ll afford it. 

“It’s been a rollercoaster,” said Kayla Walker. “I’ve written it off now. I feel like it’s unlikely to happen.”

The 26-year-old from Virginia has about $40,000 in federal student debt and another $7,000 in private loans. She applied for forgiveness when the application opened, but cynically views the plan as “an election point” that politicians used to garner votes. 

As she prepares to face a $185 monthly bill for her federal loans starting in January — plus the $130 payment for her private ones — Walker is considering moving back in with her parents. 

“It’s all been really up in the air and hard to make decisions without knowing what’s going to happen with loan forgiveness,” she said. “If these loans restart, there's no way my monthly budget can account for that.”

Uncertain Path
More than 26 million borrowers have already submitted the information needed to be considered for Biden’s plan, which would forgive $10,000 for those who made less than $125,000 in 2020 or 2021, or married couples who made under $250,000. Pell Grant recipients could have up to $20,000 forgiven under the program. Those people are now in limbo, as the legal battle potentially heads to the Supreme Court. 

In the meantime, nearly two-thirds of student loan experts surveyed by Bloomberg News expect another extension of the payment freeze. On Monday, a coalition of more than 200 organizations — including the American Civil Liberties Union and the NAACP — called for the pause to continue. 

That’s what Mariah Jae in Brooklyn is hoping for. The 31-year-old, who works in health care compliance, graduated college in 2013 with about $20,000 in federal student loans. She currently has about $10,000 left, meaning Biden’s forgiveness program would wipe out her debt. 

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