EXPLAINER: Where does student loan forgiveness stand?

A federal appeals court in St. Louis has created another hurdle to President Joe Biden’s plan to provide millions of borrowers with up to $20,000 per person in federal student loan relief..

The court agreed on Monday with a preliminary injunction halting the program in one of several cases that challenged the debt relief plan.

With the forgiveness program pending, millions of borrowers have begun to wonder if they will get debt relief at all. The fate of the plan is likely to ultimately end in the Supreme Court.

Here’s where things stand:


The debt forgiveness plan announced in August would cancel $10,000 in student loan debt for those with less than $125,000 or families with incomes of less than $250,000. Pell Grant recipients, who typically demonstrate greater financial need, would receive an additional $10,000 in forgiven debt.

College students qualify if their loans were disbursed before July 1st. The plan makes 43 million borrowers eligible for some debt forgiveness, and 20 million could wipe out their debt entirely, according to the administration.

The Congressional Budget Office has said the program will cost about $400 billion over the next three decades.

The White House said 26 million people have applied for debt relief, and 16 million have already been approved.


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A three-judge panel made the ruling Monday from the 8th US Circuit Court of Appeals in St. Louis. Louis, who was considering an effort by the Republican-led states of Nebraska, Iowa, Kansas, Missouri, Arkansas and South Carolina to block the loan forgiveness program.

The ruling by the panel of three Republican appointees — one appointed by President George W. Bush and two by President Donald Trump — extends until the matter is resolved in court. Before that, the court temporarily suspended him.

Nebraska Attorney General Doug Peterson, a Republican, said in a statement that the ruling “recognizes that this effort to forgive more than $400 billion in student loans threatens to cause major damage to the economy that cannot be done.”

White House Press Secretary Karine Jean-Pierre said the administration is confident in its legal authority regarding the student debt relief plan.

“The Administration will continue to fight these baseless lawsuits from Republican officials and special interests and will never stop fighting to support working class and working Americans,” Jean-Pierre said.


On Thursday, United States District Judge Mark Pittman – an appointee of former President Donald Trump who is based in Fort Worth, Texas – ruled that the program used the power of Congress to make laws.. The administration immediately filed a notice of appeal.

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

The law allows the secretary of education to waive or modify the terms of federal student loans in times of war or national emergency. The administration said the COVID-19 pandemic has created a national emergency.

But Pittman said such a massive program required clear authorization from congress.

The plan faces other legal challenges. In October, Supreme Court Justice Amy Coney Barrett rejected an appeal from a group of Wisconsin taxpayers. A federal judge earlier dismissed the group’s lawsuit, finding they did not have the legal right, or standing, to bring the case.


Pittman’s decision destroys the original legal argument used to defend the Biden plan. Previously, the White House was able to avoid legal attacks in lawsuits by tweaking the details of the program.

One law argued that automatic debt cancellation would leave borrowers paying heavier taxes in states that tax canceled debts. The administration responded by allowing borrowers to opt out. Another suit alleged that Biden’s plan would hurt financial institutions that earn income on certain types of federal student loans. The White House responded by removing those loans from the plan.

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The Texas ruling, however, argues that the HEROES Act does not authorize mass debt cancellation. The law gives the Department of Education broad flexibility during national emergencies, but the judge ruled that it is unclear whether debt cancellation was a necessary response to COVID-19, noting that Biden recently declared that the pandemic was over.


The legal situation is complicated by the numerous lawsuits. The Texas case and the lawsuit filed by the six states are likely to be appealed to the Supreme Court. Before it reaches that level, the 5th and 8th Circuit courts of appeals — the two most conservative justices — will rule in every case.

The case before the 8th Circuit could end up in the Supreme Court soon now that the panel has approved the injunction sought by the six GOP-led states.

Likewise, the administration has indicated it will appeal the Texas ruling. If the 5th US Circuit Court of Appeals is asked to block the Pittman ruling pending an appeal, the losing side could then go to the Supreme Court.

In either case, the appeals courts would not issue a final ruling on the program’s validity, but on whether it can continue pending challenges.

Meanwhile, the Biden administration is no longer accepting applications for student loan forgiveness.


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