President Biden’s student loan forgiveness application officially launched in October and millions of borrowers applied for student loan debt relief. But, as you may have heard, Biden’s plan to forgive up to $20,000 of student loan debt for eligible borrowers faces signficiant legal challenges. The plan was blocked by the 8th Circuit Court of Appeals before a federal judge in Texas ruled that Biden’s student loan forgiveness program is unconstitutional. As a result, the Biden administration is not currently accepting new applications for student loan debt relief.
However, if you have already applied for student loan forgiveness, the Biden administration has said that it will hold onto your application, while the case proceeds through the courts. And, if you have been approved for student loan relief, the Department of Education should have sent you an email regarding your approved stratus and the hold on forgiving student loan debt.
In the meantime, the U.S. Supreme Court will take up the student loan debt forgiveness dispute in February. Since a Supreme Court ruling in the case won't be expected until June, the Biden administration has extended the student loan payment pause until at least June 30, 2023.
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Buit, if you're wondering what is going on with student loan forgiveness and what to expect, here is some information on the legal challenges involved.
Texas Court Ruling Blocks Student Loan Forgiveness--For Now
A federal judge in Texas ruled that Biden’s student loan forgiveness program is unconstitutional essentially because the judge believes that the program is an illegal overreach of Presidential power.
Legally speaking, the Texas ruling vacated Biden’s student loan forgiveness plan, but that didn't practically change the situation with student loan forgiveness. That’s because student loan forgiveness was already on hold due to another court order that blocked the federal government from forgiving student loans. The Texas ruling though, was the latest in a string of challenges to Biden’s student loan forgiveness program in 2022.
So, what does the Texas judge’s ruling about student loan forgiveness mean for you? The Biden administration had previously said that you could apply for student loan forgiveness if you haven’t already done so. But because of the Texas ruling, the application for student loan forgiveness is blocked until further notice. That means that the federal government won't be accepting new applications for now, and won't be forgiving any student loan debt--for now.
It's important to note that litigation takes time. There’s a way to go with legal appeals before we know the final legal word concerning the constitutionality of Biden’s student loan forgiveness plan. The Supreme Court will hear oral arguments in the case in February, but is not expected to issue a final ruling until June.
So, the acceptance and processing of student loan applications will be on hold until legal disputes over the program are settled. And that understandably raises questions and concerns about what borrowers can expect.
Which Other States Sued to Block Student Loan Forgiveness?
In a case separate from the Texas lawsuit, the 8th Circuit Court of Appeals blocked Biden’s student loan forgiveness plan, which also meant that the Biden administration couldn't cancel student loan debt until the court can consider legal arguments from both sides.
Six Republican-led states challenged the student loan debt forgiveness program in court, arguing that the Biden’s program would harm student loan companies. The states that sued to block student loan forgiveness include: Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina.
The federal court order pausing student loan debt cancellation delayed the processing of student loan debt relief (i.e., the Biden administration has had to wait to actually cancel student loan debt).
What To Do About Blocked Student Loan Debt Relief
What can you do about your student loan debt relief application? For now, whether you've already applied or not, stay tuned to updates about student loan debt relief. If you applied for relief and are approved, you should have received an email from the U.S. Department of Education explaining that you are approved, but that student loan forgiveness is on hold due to legal disputes. Student loan payments are paused until at least June 30, 2023, and so won't resume in January.
The Biden administration also encourages borrowers to sign up for updates and get information at studentaid.gov.
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