Federal Judge Strikes Down Biden’s Student Debt Relief Plan
On Nov. 10, 2022, a U.S. District Court for the Northern District of Texas judge struck down President Joe Biden’s student loan forgiveness program, declaring the program a “complete usurpation” of congressional authority by the executive branch. The U.S. Department of Justice immediately appealed the decision to the 5th U.S. Circuit Court of Appeals. The District Court’s ruling prompted the U.S. Department of Education (DOE) to stop accepting applications for the student debt relief program.
Before the Biden administration can cancel any federal student loan debt under the program, the circuit court must issue a final ruling, which may take weeks or months. Because of the appeal, the timing of any debt relief is now uncertain.
Biden’s debt relief plan, which provides up to $20,000 in debt relief for qualifying borrowers, was already on hold due to a separate legal challenge, but the DOE continued accepting applications. Since the DOE started receiving applications from borrowers on Oct. 17, 2022, the department has received approximately 26 million applications.
“For the 26 million borrowers who have already given the Department of Education the necessary information to be considered for debt relief—16 million of whom have already been approved for relief—the [d]epartment will hold onto their information so it can quickly process their relief once we prevail in court.”
- White House Spokesperson Karine Jean-Pierre
What’s Next?
Borrowers will have to wait until the 5th Circuit Court makes a ruling before knowing whether they will receive any debt relief. If the District Court’s ruling is overturned, the Biden administration could begin canceling student debt. However, if the circuit court’s ruling is appealed, the case could go to the U.S. Supreme Court, which has so far refused to hear challenges to the plan. Student loan payments are currently set to resume in January.
Borrowers are encouraged to stay updated by visiting the DOE’s website and sign up to receive email and text updates for the latest information.
We will keep you apprised of any notable updates from the current administration.
The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2022 Zywave, Inc. All rights reserved.