Student Loan Forgiveness Status Changes Again
In a modest victory for the Biden administration, a federal judge has allowed a temporary restraining order against a new student loan forgiveness plan to expire. The development clears the way for the administration to begin finalizing the rule, potentially bringing relief to tens of millions of Americans saddled with student debt just weeks before the November election. While this news is a promising step in the right direction, more lawsuits are on the way.
What does this news mean for you?
Wednesday’s decision stems from a lawsuit filed in September by seven Republican-led states seeking to overturn the Biden administration’s new student loan forgiveness rule. What’s more, the rule was an attempt to circumvent a previous Supreme Court decision against Biden’s original sweeping plan for student loan forgiveness.
Now a federal judge in Georgia has ruled that the temporary restraining order that stopped the program will expire today. The expiration of the restraining order marks a promising step forward for the program, which aims to provide narrower, more targeted debt relief than its predecessor.
However, the path forward remains uncertain. Most egregiously, a Missouri court could still step in and stop the program before it takes effect, and more legal challenges are generally expected. Despite these potential obstacles, the ruling allows the Biden-Harris administration to continue debt relief as the November election approaches.
The proposed plan offers partial or full debt relief to borrowers in the following circumstances:
-
Borrowers who owe more than at the start of repayment
-
Those who paid off their student loans no later than July 1, 2005.
-
Those who repaid their graduate loans no later than July 1, 2000.
-
People who are already eligible for student loan forgiveness under one of the existing government programs but have not yet applied.
-
Students of “low-finance” programs
Bottom line: While this represents a step toward limited loan forgiveness, the administration faces a complex legal situation. The coming weeks will likely determine whether this new, more targeted approach can withstand scrutiny from the courts and deliver promised relief to student loan borrowers.