President Joe Biden speaks about the student loan forgiveness in the South Court Auditorium on the … [+]
The U.S. Supreme Court has released a more detailed timeline on how it intends to handle two lawsuits challenging President Biden’s student loan forgiveness program.
Here’s where things stand.
Biden’s one-time student loan cancellation program would have allowed 40 million borrowers to receive up to $20,000 in federal student loan forgiveness. But the program has been blocked — and no one has received any loan forgiveness — due to two legal challenges:
The Biden administration has consistently maintained that the lawsuits are frivolous and that the student loan forgiveness program is legal, and appealed to the Supreme Court. Attorneys for the administration have argued that the administration properly relied on the HEROES Act of 2003, which grants the executive branch broad authority to modify federal student loan programs in response to national emergencies, like a pandemic. A key author of the statute filed an amicus brief with the Supreme Court, arguing that this type of debt cancellation program is exactly the kind of modifications that Congress intended when it enacted the legislation.
The Trump administration relied on the HEROES Act to initially pause federal student loan payments and interest in response to the pandemic in March 2020. And both the Trump and Biden administrations have relied on the statute to issue multiple extensions of the student loan pause beyond its original six-month period.
The Supreme Court has agreed to consider the Biden administration’s appeals in both cases. And this week, the Court set a schedule for next steps:
The Court has not yet scheduled a specific date for oral arguments, but it is expected to be in late February or early March. While a ruling would not be instant, the hearing will provide critical clues regarding how the individual justices on the Supreme Court view the legal arguments from both sides.
The Court could issue a ruling anytime after the oral argument hearing. However, major Supreme Court decisions are typically released in June.
If the Court rules in favor of the administration, the Education Department can resume processing student loan forgiveness applications, and will be able to start providing relief to borrowers. If the Court rules against the administration, however, Biden officials will have to consider a number of imperfect alternative options.
The Biden administration has extended the ongoing student loan pause in response to the Supreme Court litigation. The pause was originally supposed to end on December 31, but payments will now not resume until 60 days after a Supreme Court ruling or June 30, 2023, whichever occurs first. This means that borrowers covered by the payment pause may not have to resume payments on their student loans until August 2023.
As has been the case since March 2020, the months comprising the student loan payment pause count towards loan forgiveness periods for Income-Driven Repayment (IDR) plans and Public Service Loan Forgiveness (PSLF).
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