Where does Biden’s student loan cancellation plan stand?


of President Joe Biden student loan forgiveness program remains on hold as a federal appeals court considers a legal challenge brought by six GOP-led states.

The Biden administration continues to accept applications for student loan forgiveness, which are worth up to $20,000 per borrower, but is currently not authorized to forgive student loan debt due to a temporary administrative suspension scheduled by the 8th US Circuit Court of Appeals on October 21.

Then the appeals court will decide whether or not to grant a preliminary injunction requested by the states. If granted, the student loan forgiveness program could be suspended while litigation continues and the court hears both sides on the merits of the case. If the injunction is not granted, the cancellation of the debt can begin for the duration of the appeal.

The decision on the preliminary injunction could intervene at any time.

A lower court judge dismissed the lawsuit on October 20, ruling that the States did not have the legal standing to bring the challenge. Supreme Court Justice Amy Coney Barrett also dismissed a separate challenge to Biden’s student loan forgiveness program, refusing to appeal a group of Wisconsin taxpayers.

Meanwhile, the Biden administration also faces lawsuits from Arizona GOP Attorney General Mark Brnovich and conservative groups such as the Job Creators Network Foundation and the Cato Institute.

Numerous lawsuits claim the Biden administration lacks the legal authority to write off student loan debt broadly. But government lawyers argue that Congress gave the Secretary of Education the power to discharge his debt in a 2003 law known as the HEROES Act.

Nearly 26 million people have applied for student loan forgiveness so far, the Biden administration announced Thursday. The application was opened on October 14.

The administration also said Thursday that 16 million loan forgiveness applications could be approved this week.

“By the end of this week, the Department of Education will have approved applications for 16 million Americans and sent the necessary documents to student loan services,” Biden said during the an appearance at Central New Mexico Community College on Thursday.

But borrowers shouldn’t expect to see their debts forgiven until the appeals court lifts the program’s suspension.

Borrowers can apply online here: https://studentaid.gov/debt-relief/application.

Applicants can expect to receive an email confirmation once their application has been successfully submitted. Next, borrowers will be notified by their loan servicer if and when debt forgiveness has been applied to their account.

Borrowers have until December 31, 2023 to submit an application.

If the court allows the administration to grant student loan forgiveness, about 8 million eligible borrowers could automatically receive debt forgiveness because the Department of Education already has their income information. These borrowers could start seeing their debt forgiven on November 15, at the earliest, if there is no legal break in place at that time.

If Biden’s program is allowed to go forward, individual borrowers who earned less than $125,000 in 2020 or 2021 and married couples or heads of households who earned less than $250,000 a year during those years could see up to $10,000 of their federal student loan debt forgiven.

If an eligible borrower also received a Pell Scholarship while enrolled in college, the individual is eligible for debt forgiveness of up to $20,000.

There are a variety of federal student loans and not all are eligible for relief. Direct federal loans, including subsidized loans, unsubsidized loans, parent PLUS loans, and graduate PLUS loans are eligible.

But federal student loans guaranteed by the government but held by private lenders are not eligible unless the borrower has requested to consolidate those loans into a direct loan by Sept. 29.

This story has been updated with additional information.

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