The Biden administration has formally asked the U.S. Supreme Court to intervene in an ongoing legal dispute over the president’s one-time student loan forgiveness program. The highest court in the land could have the final say on whether to move forward.
Here’s what borrowers need to know.
Biden’s student loan forgiveness blocked by federal courts
The Biden student loan forgiveness plan would have provided $10,000 or more in one-time debt forgiveness for borrowers who earn incomes below $125,000 (or $250,000 if married). But after 26 million borrowers applied for loan forgiveness (and 16 million were approved), federal courts blocked the initiative before a single borrower received loan forgiveness.
In a legal challenge, a Texas federal judge declared the program unconstitutional after a conservative nonprofit organization argued that the Biden administration failed to follow proper procedures under federal law. The court ruled that Biden’s loan cancellation plan was “an unconstitutional exercise of congressional legislative power and must be struck down.”
In another legal challenge, the 8th Circuit Court of Appeals – in a 3-0 decision – granted a preliminary injunction blocking the program’s implementation after a coalition of Republican-led states appealed the rejection of their own lawsuit, which had argued that Biden’s program starves states, through state-affiliated FFELP agencies, of revenue.
It is the decision of the 8th Circuit that the administration is currently appealing to the Supreme Court. The administration is also appealing the Texas case, but that must first go to the 5th Circuit Court of Appeals (this case, however, could also end up in the Supreme Court).
Supreme Court’s stance on Biden’s student loan forgiveness program unclear
The Biden administration is asking the Supreme Court to overturn its preliminary injunction, arguing — as the district court had found — that the states lacked standing to bring the lawsuit in the first place (meaning they have not demonstrated concrete harm sufficiently linked to the political protest). The Student Loan Forgiveness Program application portal has been suspended following court orders.
“Basically, the [student loan forgiveness] The plan falls squarely within the clear text of the Secretary’s statutory authority,” Justice Department attorneys wrote in their brief. “Indeed, the whole purpose of the HEROES Act is to authorize the Secretary [of Education] provide student loan relief to at-risk borrowers due to a national emergency – precisely what the secretary has done here. And the plan was based on the Secretary’s review of relevant economic data and the Department’s long experience with borrowers returning to repayment. The Eighth Circuit did not address either the text of the law or the data supporting the plan.
It’s unclear how the Supreme Court will consider the administration’s arguments. The court’s conservative majority has already expressed skepticism, and sometimes hostility, to the discretion and authority of the federal administrative agency. The court asked the coalition of states to respond with their own written arguments by noon Wednesday.
In the meantime, the Biden administration is considering extending the student loan payment pause beyond the Dec. 31 deadline in response to ongoing litigation.
Other student loan forgiveness initiatives remain active
While the legal battle over Biden’s one-time loan forgiveness program has blocked borrowers from receiving relief, other student loan forgiveness initiatives are unaffected by those disputes and are continuing. This includes :
- Automatic student loan forgiveness through group discharges for over 800,000 borrowers who attended Corinthian Colleges, ITT Technical Institutes, and other predatory institutes.
- $6 billion in student loan forgiveness for more than 200,000 borrowers in a class action settlement finalized this week to resolve disputed borrower defense claims against repayment.
- The limited PSLF waiver, which expands access to civil service loan forgiveness (the waiver ended on October 31).
- The IDR account adjustment, which provides retroactive credit over the term of a borrower’s student loan cancellation.
Further Reading on Student Loan Forgiveness
Have you received a student loan forgiveness email? Ministry of Education sends mass notices to borrowers
Court approves $6 billion in student loan forgiveness for 200,000 borrowers to resolve lawsuit
8 Signs Biden Could Really Extend Student Loan Pause
Can you apply for multiple student loan forgiveness programs? Yes – with some caveats