Tiffany Wilson had the plan all worked out: request a refund of the $16,000 she used to pay off her student loans during the pandemic. Then, apply for President Biden’s debt-relief program to cancel up to $20,000 in federal student-loan debt. That way, she could keep her $16,000 and still have her balance wiped.
But that plan took a turn as legal challenges threw Biden’s program into limbo. Now as the fate of the program rests in the hands of the Supreme Court, Wilson, 38, said she suspects she will have to return every dollar of her refund.
“It’s a good thing I saved all the money,” said Wilson, a state employee in North Carolina. “I was always a little skeptical [the debt relief program] would happen, and now I have no hope.”
With Biden’s student-loan cancellation policy up in the air, borrowers like Wilson who received refunds are abandoning plans of building their savings or buying homes, and they now are preparing for what many see as the inevitable demise of the president’s program. In interviews with a dozen borrowers, nearly all have stashed away their refunds in savings accounts, hoping to earn interest on the money before sending it back to the Education Department.