As a result of a flurry of litigation, the future of President Joe Biden‘s student loan forgiveness plan remains uncertain.
As a result of a flurry of litigation, the future of President Biden’s plan to cancel student loans is uncertain. It’s a new year, and in 2023, millions of student loan holders might receive substantial loan forgiveness. Here are important developments and what borrowers may anticipate over the coming year.
Student Loan Forgiveness Update
At least two cases will be heard by the Supreme Court next month. Here is the status of the cases against the plan, as well as a general estimate of when debtors will receive responses about the future of the program.
Biden v. Nebraska, from the 8th Circuit Court of Appeals, which encompasses states in the mid-to-north-central United States, was the first case to block the program and will now be examined by the Supreme Court.
A coalition of six states led by Republicans contested Biden’s initiative, alleging that the debt relief would be economically detrimental to their states due to the loss of tax money and other revenues from state organizations’ business agreements with some loan servicers.
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Over 40 Million Americans Await For The Plan
The second lawsuit that deemed Biden’s scheme unlawful, Department of Education v. Brown, was decided by the 5th Circuit Court of Appeals.
In addition, the case will be heard by the Supreme Court this year. The court is set to hear oral arguments in late February, and a decision is likely to be rendered by June 2023.
If the Supreme Court approves Biden’s plan, the Education Department can immediately begin processing the 26 million applications for student loan forgiveness that have already been received and will reopen the application portal for everyone else.
Up to 40 million student loan holders could potentially benefit from the plan, with nearly half having their federal student loan obligations totally forgiven.
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