Student Loan Forgiveness Program May Be Delayed

There is a possibility that Biden's student loan forgiveness plan may be delayed or even canceled if lawsuit challenges block the measure.

By Jessica Marie Baumgartner | Published

Biden Admin Discreetly Changes Student Loan Relief Act, Making Millions Of Borrowers Ineligible For Forgiveness

Although the Biden Administration’s student loan forgiveness plan seems like a done deal, it has yet to be solidified and may be delayed if not overturned. Detailed plans and applications for this massive loan transfer have yet to be set in place. Once Americans are fully able to apply, lawmakers who oppose this measure will be able to file suit and challenge the political move

The current student loan forgiveness plan would “forgive” college debt up to $20,000 if those taking on loans received a Pell grant, and up to $10,000 for those who did not. Only Americans making less than $125,000 per year are eligible. In addition, student loan payments have been paused through the end of the year. 

While many believe this will abolish the debt entirely, the fact of the matter is that it merely works to transfer the bill onto taxpayers — including those who have already paid for their education, and those who were unable to afford college. In addition, the measure is likely to harm low-income Americans rather than help them as student loan forgiveness may be taxable in some areas, and is projected to cost much more than originally proposed. This will not only decrease take home pay, but increase already skyrocketing inflation rates that will continue to drive up the cost of food, clothing, utilities, and rent. 

This has led those who oppose student loan forgiveness plans to prepare for litigation. 22 state governors have already signed a letter demanding that Biden drop his proposed plan. While this formal measure is unlikely to sway the current administration, it is the first step to taking legal action. 

Once The Biden Administration releases the student loan forgiveness plan’s information to the public and begins the application process, state leaders will be legally eligible to file suit. This is expected to at least delay the process, and may likely lead to another historic Supreme Court ruling. The plan itself will be placed under intense scrutiny being that it has been proposed utilizing the 2003 Higher Education Relief Opportunities for Students (“HEROES”) Act, created to offer relief in special circumstances, like loan fraud and so on. 

Current experts are not convinced that the new student loan forgiveness plan can be classified under the HEROES act. This is due to the broad nature of the Biden Administration’s proposal. It does not work to prove that direct economic harm was committed against a specific group of people, nor can every student who is struggling blame the system for their problems. 

student loan forgiveness

Each situation is different, and so, may prove detrimental to the student loan forgiveness plan. Republican lawmakers are already preparing to sue against transferring the debt of students who signed large loans onto all American taxpayers. Many claim that it is unconstitutional to force adults to pay for debts they did not legally agree to pay or reap the benefits of, and the ensuing legal cases will likely delay, if not nullify the Biden Administration’s proposed plans.