If you have student loans, you know they make a huge difference in your life. You’re probably always asking questions about them and trying to figure out how they impact your current financial standing.
Do student loans affect credit score calculations? Is there a way to get my student loans forgiven? These are the kinds of things that can make a real difference in your life, so the answers matter.
With that in mind, let’s discuss the student loan forgiveness proposal made by President Biden that is currently being debated. We’ll also talk about some companies that will benefit if the proposal gets shut down.
What is the Student Loan Forgiveness Plan?
President Biden suggested forgiving some student loan debt quite some time ago. His proposal involved forgiving up to $10,000 in student loan debts for eligible borrowers. Those were individuals who had borrowed money from the federal government rather than from private lenders.
He also suggested forgiving up to $20,000 for individuals who had borrowed money through Pell Grants. He originally came up with this plan during the early days of the pandemic, when many of those with student debt were struggling to make their payments.
After clearing several legal hurdles, President Biden’s loan forgiveness plan has been blocked. At the moment, the Supreme Court is debating it.
What Companies Benefit if the Plan is Shut Down?
There are about 26 million people who are waiting to hear whether the student loan forgiveness plan will go through. There are certain companies that are also waiting to hear the plan’s fate, but for different reasons.
Some business entities want to capitalize on the many individuals with student loans. The online bank SoFi is one of those. It has a service that allows those with outstanding student loans to refinance those debts. There is also Chipper. It helps current or former students find the most sensible ways to get relief or repay their loans.
Peanut Butter is another company that relies on student debt to make money. It helps companies that choose to offer student loan forgiveness as a potential worker benefit.
Other Loan Refinancing Companies
We mentioned SoFi, one of the most prominent loan refinancing companies. There are several other ones with more dubious reputations.
Some of them use predatory tactics when they get people to sign up with them. These current or former students are looking to refinance their loans, but they don’t understand the fine print of the contracts they sign with these entities. They might end up paying more money in interest rates rather than less.
These companies would have fewer potential targets if President Biden’s student loan forgiveness program goes through.
The Supreme Court Has an Important Decision to Make
The Supreme Court’s decision regarding President Biden’s student loan forgiveness plan is going to have major repercussions. If it goes through, then about twenty-six million current and former students will have less debt or no debt.
However, if the Supreme Court ultimately decides not to let the program go through as proposed, several companies will likely rejoice. Peanut Butter helps businesses that offer student loan forgiveness as a worker benefit. SoFi helps individuals who want to refinance their loans, while Chipper works with student debtors to provide loan relief.
Several other companies have business models based on students having debt. If President Biden’s plan goes through, they will have fewer potential clients.
Millions of students and hundreds of companies are waiting for this proposal’s final outcome. It’s anybody’s guess how the Supreme Court will rule. However it turns out, some will be happy about it, while others will be dealt a major blow.