EXPLAINER: Where does student loan forgiveness stand?

The District Court in St. Louis has set up another way to block President Joe Biden from giving millions of borrowers $20,000 each to forgive their student loans..

The court on Monday agreed to grant the injunction halting the program in one of several lawsuits challenging the debt relief plan.

With the forgiveness program on hold, millions of borrowers are beginning to question whether they will get debt relief. The future of the policy may end up in the Supreme Court.

Here’s where things stand:


The loan forgiveness plan announced in August will freeze $10,000 in student loan debt for those making less than $125,000 or families with less than $250,000. Pell Grant recipients, who often demonstrate greater financial need, will receive an additional $10,000 in loan forgiveness.

College students qualify if their loans were paid off before July 1. The plan makes 43 million borrowers eligible for loan forgiveness, and 20 million who could have their loans written off entirely, according to the administration.

The DRM Budget Office estimates that the program will cost about $400 billion over the next three decades.

The White House said 26 million people have applied for loan repayments, and 16 million people have already received their help.

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The decision on Monday was made by three judges from the 8th US Circuit Court of Appeals in St. Louis, which has been considering efforts in the Republican-led states of Nebraska, Iowa, Kansas, Missouri, Arkansas and South Carolina. cancel the loan forgiveness program.

The ruling by a panel made up of three Republican nominees — one appointed by President George W. Bush and two by President Donald Trump — is pending until the matter is resolved in court. In the past, the court had temporarily suspended it.

Nebraska Attorney General Doug Peterson, a Republican, said the decision “recognizes that the proposed $400 billion in student loan forgiveness poses an irreversible economic threat.”

White House press secretary Karine Jean-Pierre said the administration is confident in its policies to address student loans.

“The government will continue to fight these baseless accusations by Republican officials and special interests and will not stop fighting to support working and middle-class Americans,” Jean-Pierre said.


On Thursday, US District Judge Mark Pittman – an appointee of former President Donald Trump based in Fort Worth, Texas – ruled that the program would usurp Congress’ power to make laws.. At the same time, the authorities sent a letter of appeal.

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Pittman said the Higher Education Relief for Students Act of 2003, known as the HEROES Act, did not authorize the loan forgiveness program.

The law allows the secretary of education to cancel or change the terms of federal student loans during wartime or emergency situations. The government says the COVID-19 pandemic has caused a national crisis.

But Pittman said such a large program would require clear authorization from Congress.

The plan has faced some legal challenges. In October, Superior Court Judge Amy Coney Barrett denied the appeal from a group of Wisconsin taxpayers. A federal judge had already dismissed the group’s case, finding they did not have the right or standing to file the case.


Pittman’s proposal breaks down the argument used to justify Biden’s plans. In the past, the White House has been able to avoid lawsuits by disclosing details about the program.

Another case stated that debt write-offs cause borrowers to pay more taxes in states that tax the written-off debt. Management responded by letting tenants out. Another suit said Biden’s plan would hurt financial institutions that make money on certain types of student loans. The White House responded by pulling the loans from the system.

The Texas decision, however, argues that the HEROES Act does not provide the power to limit the number of loans. The law gives the Education Department temporary flexibility in emergency situations, but the judge ruled that it was unclear whether the loan waivers were appropriate for COVID-19, saying Biden had declared the pandemic over.

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The legal situation is complicated due to the large number of cases. It seems that the Texas case and the case filed by the six states will be appealed to the Supreme Court. Before it gets to that point, the 5th and 8th Circuit appeals courts — both ruled by nonpartisan judges — will rule on each case separately.

The case before the 8th Circuit could end up in the Supreme Court soon after the panel issued a ruling that six GOP-led states had requested.

Likewise, the administration has indicated that it will appeal the Texas decision. If the US Fifth Circuit Court of Appeals is asked to block Pittman’s decision pending an appeal, the losing side could go to the Supreme Court.

In any case, the appeals courts will not make a final decision about the program’s validity, but whether it can continue as challenges continue.

Currently, Biden’s administration is no longer accepting applications student loan forgiveness.


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