The United States Supreme Court has announced that it will review the legality of the Biden Administration's student loan forgiveness plan in early 2023.
- The U.S. Supreme Court has announced it will hear oral arguments on the legality of President Joe Biden's student loan forgiveness plan in February 2023, with a decision expected by June of that year.
- Although two separate court orders had halted the student debt forgiveness plan, the one being reviewed by the Supreme Court is from the U.S. Court of Appeals for the 8th Circuit.
- Due to the ongoing litigation, the White House extended the student loan payment pause until 60 days after either the program has been implemented or June 30, 2023, whichever comes first.
Culmination of Legal Challenges
On Thursday, the Supreme Court said in an order that, although a nationwide injunction on President Joe Biden's student loan forgiveness plan will remain in place for the time being, it will hear arguments on the program's legality in the near future. Oral arguments are currently scheduled for February 2023, and its decision is expected by June of that same year.
Two separate court orders have blocked the student debt forgiveness plan. The order that will be reviewed by the Supreme Court was issued by the U.S. Court of Appeals for the 8th Circuit. Six states—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—had argued the president overstepped his authority with the loan forgiveness program and that it threatens the revenue of their state-based loan servicers, which profit from federal student loan payments.
The Republican-led states' case was dismissed, but they requested for injunction pending appeal from the 8th Circuit Court of Appeals, which was granted. On November 18, the Biden Administration asked Associate Justice Brett Kavanaugh, who's responsible for emergency applications regarding the 8th Circuit, to lift said injunction.
The other block was the result of a separate court order. The initial lawsuit had been filed by the Job Creators Network on behalf of two borrowers, which had argued that the plaintiffs had been unfairly excluded from the student debt forgiveness program. On November 11, U.S. District Judge Mark Pittman ruled in favor of the plaintiffs and vacated the program. The Department of Justice soon after filed a notice to appeal with the U.S. Court of Appeals for the 5th Circuit, which was rejected one day prior to the Supreme Court's announcement.
State of the Debt Forgiveness Plan
Biden, who pledged during his campaign pledged to forgive $10,000 in student loan debt, unveiled his student loan forgiveness program back in August 2022. It includes up to $20,000 in debt cancellation for Pell Grant recipients and up to $10,000 for non-Pell Grant recipients (private student loans are ineligible for forgiveness). To date, more than 40 million borrowers in total are currently eligible for debt relief, approximately 26 million Americans have applied for the program, and the U.S. Department of Education had already approved 16 million of those requests.
While you might have been one of the lucky ones to have already completed an application, the U.S. Department of Education has suspended the program while these lawsuits are making their way through the court system. As borrowers await the final court decisions, the White House has extended the student loan payment pause, which is now set to end 60 days after either the program has been unblocked or June 30, 2023, whichever comes first.