Student Loan Forgiveness on Hold: Borrowers Await Supreme Court Decision

The DOJ has defended the legality of the Biden Administration’s student loan forgiveness program in a brief filed to the U.S. Supreme Court.

The brief argues that the plan is within the education secretary’s authority and that a second lawsuit lacks standing. This is the latest development in a legal fight that has left 40 million student loan borrowers uncertain about the future of their finances, according to Yahoo! Finance in their article published on January 5, 2023.

The Education Department stopped accepting student loan forgiveness applications in November due to court rulings.

However, Washington Post mentioned in their article published on November 18, 2022 that the Biden Administration asked the U.S. Supreme Court to reinstate the program. The DOJ argues that the HEROES Act gives the Secretary authority to act during a national emergency such as COVID-19.

The DOJ brief argues that both previous administrations used the HEROES Act to pause student loan payments during the pandemic, and that the state of Missouri lacks standing to sue based on potential harm to a loan servicer in the state and that any damage to the servicer is speculative and not harm to the state. The Education Secretary is confident in the program’s legal authority to prevent financial harm caused by the pandemic.

The Biden Administration has filed a brief with the Supreme Court to reinstate the student loan forgiveness program, borrowers should update contact information with loan servicers and start saving for payments.

President Biden extended the payment pause on federal student loans until June 2023, borrowers should also look into different student loan repayment options and updates to Public Service Loan Forgiveness.