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Thursday December 8th

Biden’s Student Loan Forgiveness Plan Facing Legal Troubles

<p><em>President Biden’s plan for student loan forgiveness is facing legal challenges, even as over 20 million people have already applied for the program. (Flickr/</em><a href="https://flic.kr/p/Pwod3d" target=""><em>”Oh, these student loans!”</em></a><em> by CafeCredit, November 5, 2016). </em></p>

President Biden’s plan for student loan forgiveness is facing legal challenges, even as over 20 million people have already applied for the program. (Flickr/”Oh, these student loans!” by CafeCredit, November 5, 2016).

By Aneri Upadhyay

Staff Writer 

Student loans may be relieved with President Joe Biden’s new plan for forgiving up to $10,000 in student loan debt for people earning less than $125,000 a year, as well as up to $20,000 for people who have received Pell Grants. According to The Hill, Pell Grants are awarded to low-income undergraduate students who need it to pay for college. 

Biden announced short-term reforms to the Public Service Loan Forgiveness program last October. According to Business Insider, this program is meant to help government and nonprofit workers forgive debt after ten years of payment. 

Biden’s plan also includes extending the deadline on past payments through the use of a waiver. It includes decreasing the criteria for eligibility for loan forgiveness as well, as only a small number of people can currently qualify for it. 

He hopes to cut monthly payments by 50% and hold universities accountable when tuition prices are raised, according to The White House

“My plan is going to make a real difference to lower the monthly costs for families,” Biden said at Central New Mexico Community College, as reported by the Wall Street Journal.

These reforms are planned to be implemented in July 2023; however, they were blocked by a federal appeals court after six states sued the Biden Administration, according to CNN.

Attorneys general from Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina have sued the administration to stop the loan forgiveness from being implemented, arguing that it is unfair to taxpayers, who would have to help pay for the forgiven loans. 

These states also believe that Biden does not have the power to make that kind of decision, according to USA Today.

However, lawsuits like this have previously been dismissed, according to Forbes, as judges have concluded that there is no legal standing for a lawsuit to occur. 

As reported by CNBC, U.S. District Judge Henry Autrey concluded that “important and significant challenges to the debt relief plan,” were brought up by the states but the case could not be pursued due to the lack of legal standing. 

According to TIME, 22 million people applied for student loan forgiveness through the Biden Administration’s reform system within the first week of availability, a week before the lawsuit started. 

During the court case, the White House still encouraged people to apply for loan forgiveness as stated by The Hill. The Biden Administration states that the lawsuit did not mean that they could not look at applications and hold them to be reviewed once possible. 

“The order does not reverse the trial court’s dismissal of the case, or suggest that the case has merit,” said Karine Jean-Pierre, the White House Press Secretary, according to TIME. “It merely prevents debt from being discharged until the court makes a decision.”




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