Skip to main content

%1

White House Prepares for Possibility Supreme Court Could Kill Student Loan Forgiveness Plan

Submitted by jhartgen@abi.org on

Biden administration officials are quietly planning for the possibility that the Supreme Court could strike down President Biden’s sweeping student loan forgiveness program, the Wall Street Journal reported. The high court is expected to issue a decision this month on the plan to eliminate up to $20,000 in federal student debt for millions of borrowers. During oral arguments in February, the court’s conservative majority appeared skeptical that federal law allows the education secretary to wipe an estimated $430 billion in loans from the government’s books. While White House officials maintain publicly they are confident the Supreme Court will uphold the program, some in the administration have expressed concerns in private that the conservative majority will kill it. Administration officials have been discussing policy options that could help the tens of millions of borrowers who are at risk of not getting the loan forgiveness that Biden promised. If the court blocks the program, the Biden administration is unlikely to respond with a new plan to cancel student debt on a large scale using a different legal authority. Though some policy officials in the administration have analyzed alternative legal routes to massive debt cancellation, such a plan, if pursued, likely wouldn’t take shape for many months. Meanwhile, administration officials are discussing more targeted policy options, as well as measures aimed at helping borrowers who will soon be required to resume making payments on their loans for the first time in more than three years after payments were suspended due to the pandemic. Their goal is to be prepared to respond to the potential blocking of the program with an explanation of the other ways the administration is trying to assist borrowers. Biden hasn’t yet signed off on a post-Supreme Court-decision strategy.

Senate Clears Repeal of Biden Student Loan Forgiveness Plan

Submitted by jhartgen@abi.org on

A joint resolution to block President Joe Biden's student loan relief proposal cleared the Senate Thursday, but that's likely the end of legislative efforts to scrap the initiative, Roll Call reported. That's because the White House has said Biden will veto the measure, which cleared the Senate by a vote of 52 to 46. Democratic Sens. Joe Manchin III of West Virginia and Jon Tester of Montana, along with independent Sen. Kyrsten Sinema of Arizona, supported the measure, as did every Republican. The resolution passed the House last week, but neither vote drew enough support to override a veto. Despite the legislative wrangling, the ultimate test for the proposal is whether it survives challenges before the Supreme Court, which heard arguments in February. Justices are expected to issue a ruling before the end of June.

Student Debt: 615,000 Borrowers Have Received Public Service Loan Forgiveness

Submitted by ckanon@abi.org on
The Biden administration has approved the discharge of student loan debt for more than 615,000 borrowers since October 2021 under temporary changes to the public service loan forgiveness (PSLF) program, Yahoo! Finance reported. The discharged amount totals $42 billion in debt and is a big increase from the previous administration’s record, which approved just 7,000 borrowers under the PSLF program, or only 2% of PSLF applicants, leading to the basis for the expanded program eligibility. The changes — known as the PSLF waiver — allowed previously denied borrowers to reapply, expanded who qualifies to apply for forgiveness, and counted payments that were otherwise not eligible for the original program. Employees who have worked at least 10 years in the public service jobs with federal, state, local or certain nonprofit organizations are eligible for the PSLF program, including military service members who don’t qualify for other military loan forgiveness programs. Under the normal PSLF program, borrowers must work at least 10 years with a qualifying employer and have made at least 120 full on-time payments in a standard payment plan to be eligible. Also, only Direct Loans qualified for PSLF, but after more than 98% of borrowers who applied for the PSLF program were denied loan forgiveness by the Education Department under former Education Secretary Betsy DeVos, the American Federation of Teachers, among others, sued the department for how it managed the program. The PSLF waiver was enacted as part of the 2021 legal settlement of that lawsuit with the Education Department. The changes it enacted expired Oct. 31, 2022, as part of that settlement.