Student loan forgiveness is still up in the air

Like everyone's favorite trivia game show, the Biden admin's federal student loan forgiveness plan is in jeopardy. On Friday, the Education Department stopped accepting student loan forgiveness applications on its dedicated website, less than 24 hours after a federal judge in Texas struck down the program entirely.

⚖️ More deets: Several lawsuits have been filed in recent weeks challenging the loan forgiveness program, which would forgive up to $20,000 for some borrowers. One even resulted in the program being temporarily placed on hold until arguments are heard later this month – but until Thursday, none had succeeded in challenging the program’s legality.

• In this most recent case, the ruling called the Biden administration’s plan an “unconstitutional exercise of Congress’s legislative power.”
• It also noted that the program failed to go through normal rule-making processes, including allowing the public to weigh in on its merits.

👀 Looking ahead… The DOJ will appeal the decision. Which makes sense, since most legal analysts predict the case will end up before the Supreme Court. So to the 26 million borrowers who applied for forgiveness prior to applications being closed – sit tight.

+Worth mentioning: The pandemic-era freeze on student loan repayments will thaw on January 1, 2023. It’s currently unknown whether the Biden admin will extend it again as the court battles play out.