Blockade Continues On Biden’s Student Loan Forgiveness Program

Blockade Continues On Biden’s Student Loan Forgiveness Program

Biden’s student forgiveness would cost $400 billion 1:02

(WABNEWS) The Supreme Court said Thursday that President Joe Biden’s student loan forgiveness program will remain blocked for now. But the justices agreed to hear oral arguments in the case in February, and are expected to have a decision by June.

Biden’s program would offer up to $20,000 in debt relief to millions of eligible borrowers, but the initiative has faced legal challenges since it was announced.


Nearly two weeks ago, the Biden administration began notifying people approved for federal student loan forgiveness. About 26 million people had already applied to the program when it was frozen, prompting the government to stop accepting applications. No debt has been canceled so far.

In the case now before the Supreme Court, a district court dismissed a challenge brought by a group of states, holding that they could not prove the legal damage necessary to bring the challenge. In November, the US Court of Appeals for the 8th Circuit struck down and blocked the program.

An “erroneous injunction” by a federal appeals court, Attorney General Elizabeth Prelogar told the Supreme Court, “leaves millions of financially vulnerable borrowers in limbo, unsure about the size of their debt and unable to make financial decisions with an accurate understanding of their future payment obligations”.

She said Biden acted to address the financial damage from the pandemic and “smooth the transition to payment” to provide targeted relief to certain federal student loan borrowers who have been affected by the pandemic.

The program is designed to help borrowers who are at higher risk of delinquency or default. Once debt cancellation begins, the plan could offer up to $10,000 in student loan debt forgiveness to eligible borrowers making less than $125,000 ($250,000 per household).

Additionally, borrowers who received a Pell Grant may receive up to $20,000 in forgiveness.

When the covid-19 pandemic began, the Department of Education halted student loan payments and interest accruals to help those experiencing financial difficulties. Those payments were due to resume in January, but last week the Biden administration issued an extension due to the fact that his loan forgiveness program, announced in August, had come under multiple legal attacks.

As it stands, the payment pause will last up to 60 days after the loan forgiveness program dispute is resolved. If the program has not been implemented and the dispute has not been resolved by June 30, payments will resume 60 days later, according to the government.

A group of states, led by Nebraska, challenged Biden’s policy, arguing that it violates the separation of powers and the Administrative Procedure Act, a federal law that governs the process by which federal agencies issue regulations.

In court documents, attorneys for the states of Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina told judges that the program should remain on hiatus, especially since the Biden administration announced an extension of the pause on payments until 2023.

In a separate challenge, the US Court of Appeals for the Fifth Circuit on Wednesday night refused to lift a suspension imposed by a district court judge that was blocking the program.

That challenge is brought by two individual borrowers, Myra Brown and Alexander Taylor, who do not qualify for full debt forgiveness and who say they were denied the opportunity to comment on the education secretary’s decision to provide debt forgiveness. student loan debt to some.



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