Cancellation of the student loan has been blocked. Now what? 3 questions answered

Des questions subsistent quant à savoir si le président Joe Biden a le pouvoir d'annuler la dette de prêt étudiant.  <a href=Paul Morigi via Getty Images” data-src=”–/YXBwaWQ9aGlnaGxhbmRlcjt3PTcwNTtoPTQ2OA–/″ data “

When the Biden administration announced in August 2022 that it was canceling up to $20,000 in student loan debt per borrower, he said the idea was to give families “breathing room as they prepare to start repaying their loans after the crisis economy caused by the pandemic”. But two federal courts recently blocked President Joe Biden’s student loan relief program, ruling it unconstitutional. Here, Guillaume ChittendenTexas State University finance professor explains why and what’s next for student borrowers still hoping their loans can be forgiven.

1. Why was Biden’s student loan forgiveness program stalled?

It has been found unconstitutional. This decision was made on November 10, 2022 by Judge Mark Pittman of the United States District Court for North Texas, who ruled that the Higher Education Student Support Opportunities Act 2003 – or Heroes Act – “does not provide the executive with clear authorization from Congress” for a student loan forgiveness program. He added that the program was “an unconstitutional exercise of the legislative power of Congress and must be struck down.”

Judge’s ruling prevents any student loans from being forgiven “until a final verdict is rendered” in the case. Technically, this could be taken to the Supreme Court, but it could also be settled at the level of the Court of Appeal.

In a separate case, on November 14, a three-judge panel of the United States Court of Appeals for the 8th Circuit temporarily blocked the program until the case is resolved in court. The 8th Circuit covers seven states, including Missouri, which is one of many Republican-led states seek to block program.

Both rulings effectively block Biden’s plan to forgive up to $20,000 in student loans per borrower.

2. Can it be unlocked?

Both court decisions could be overturned. The Biden administration has argued that the Heroes Act 2003 allows the secretary of education to cancel student loans for those affected by the pandemic.

The Biden administration has already filed a notice of appeal Pittman’s Nov. 10 ruling.

On November 18, the Biden administration asked the Supreme Court to overturn the Court of Appeals order blocking student loan forgiveness. The Supreme Court asked the plaintiffs in the case of provide their response by November 23, 2022.

It’s unclear how the full court might rule. However, in two previous cases, Judge Amy Coney Barrett has beaten down tries to block the student loan cancellation plan.

3. What kind of relief can student borrowers get in the meantime?

Currently, student loan repayments are on hold, but are expected to start again in January 2023. The Biden administration could extend the payment break beyond December 2022. However, in August 2022 – when the last payment suspension extension was announced – the White House said he was supposed to be the final extension.

Despite the decline in widespread student loan forgiveness, some borrowers may still qualify for one or more targeted student loan forgiveness programs. These groups include borrowers who attended a school that closed. Student loans can also be canceled for those who are totally and permanently invalid. The students who were defrauded by their school – for example by being misled about graduate placement rates or the true cost of attending the school – may also be eligible.

In November 2022, the Biden administration released new rules to make it easier to release student loans in bankruptcy. If a student borrower can prove that their expenses equal or exceed their income, student loan debt can be eliminated in the event of bankruptcy.

This article is republished from The conversation, an independent non-profit news site dedicated to sharing ideas from academic experts. It was written by: Guillaume Chittenden, Texas State University. Like this article ? Subscribe to our weekly newsletter.

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William Chittenden does not work for, consult, own stock or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond his academic appointment.

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