Biden’s student loan relief plan continues to face legal setback after legal setback. The program was set to provide up to $20,000 in federal debt relief for student loans to more than 40 million Americans, but has effectively been shut down due to continuous legal trouble.
Most recently, on Wednesday, Nov. 30, yet another federal appeals court rejected Biden’s student loan relief plan. The U.S. Court of Appeals for the 5th Circuit rejected the request from the Department of Education asking the court to put a hold on an order from a Texas federal judge. Judge Mark T. Pittman declared Biden’s loan relief plan to be unlawful, according to The Washington Post.
Biden is also facing a separate lawsuit filed by six states on the claim that Biden’s relief plan would harm state-based loan companies. In this case before the U.S. Court of Appeals for the 8th Circuit, the Biden Administration requested that the Supreme Court intervene and reinstate the student loan relief program. The Justice Department said that if the Fifth Court denied its stay (which it now has), the government would seek relief from the Eighth Court.
These legal battles have not only been tumultuous for the Biden Administration, but also for borrowers.The last few months have been filled with uncertainty for people with student loans, whether they’ve already applied to Biden’s student loan forgiveness program or planned on applying. Luckily, because of this latest legal news, the Biden Administration has extended the COVID-era pause on student loan repayments. Student loan repayments will now resume 60 days after the Department of Education is permitted to implement the program, or 60 days after the legal battles have resolved. If this doesn’t happen by June 30, 2023, student loan repayment will resume on Sept 1, 2023. Considering repayment was going to be reinstated on Dec. 31, 2021, people with student loans have a bit more time to send in that cash.
The clarity on potential dates for repayment to restart is a positive amid the persistent legal challenges to Biden’s student loan forgiveness plan. As the courts continue to make key decisions on Biden’ student loan forgiveness plan, it’s important to stay up-to-date. You can check the studentaid.gov website (or you can even subscribe to receive news directly to your inbox) and the White House and Department of Education social media pages for updates. It’s unclear what will come of Biden’s student loan forgiveness plan, but staying up-to-date over the next few months will help you be prepared for whatever outcome.