What's the latest on Biden's U.S. student loan forgiveness?

The U.S. Supreme Court's nine justices are hearing arguments in the Biden administration's appeal of the two lower court rulings today. The court is expected to rule on this case this Spring.

U.S. President Biden delivers remarks on student loan debt relief plan at the White House in Washington
President Joe Biden is flanked by U.S. Secretary of Education Miguel Cardona as he speaks about administration plans to forgive federal student loan debt during remarks Wednesday in the Roosevelt Room at the White House in Washington.
Leah Millis / Reuters

U.S. President Joe Biden's plan to forgive federal student loans, first announced in August, was blocked by two legal challenges. It is being scrutinized by the Supreme Court on Tuesday, clouding the financial future for millions of American students and graduates.

Biden said in November he was confident the plan is legal, and announced new, temporary relief for borrowers that may mean their next loan payment is not due until August 2023.

What's the latest?

The U.S. Supreme Court's nine justices are hearing arguments in the Biden administration's appeal of the two lower court rulings today. The court is expected to rule on this case this Spring.

The court said on Dec. 1 it would hear Biden's bid to reinstate his plan, after a challenge by six states that have accused his administration of exceeding its authority.

On Nov. 22, Biden said he would extend the COVID-19 pandemic-era pause in student loan payments until no later than June 30, 2023, to allow the court to review his administration's requests.


Payments will resume 60 days after the pause ends, Biden said.

What happens next with the court cases?

The Supreme Court has agreed to hear the Biden administration's bid to put on hold a Nov. 14 decision by the St. Louis, Missouri-based 8th U.S. Circuit Court of Appeals, which granted an injunction request by Republican-led states Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina.

The administration on Dec. 2 also asked the justices to put on hold a separate Nov. 10 ruling by a Texas judge appointed by Republican former President Donald Trump that declared the debt forgiveness plan unlawful. The administration did so after the New Orleans-based 5th U.S. Circuit Court of Appeals earlier that week declined to stay the judge's ruling.

Who is eligible for loan forgiveness?

The program forgives $10,000 of debt held by the federal government for individuals who make less than $125,000. It also forgives $10,000 of debt for couples that make less than $250,000, and it forgives up to $20,000 of debt held by Pell Grant holders, who are mostly lower-income borrowers.

What is the status of applications?

About 26 million Americans have applied for student loan forgiveness since August, and the U.S. Department of Education has already approved requests from 16 million. The government stopped taking new applications Nov. 11, after the Texas judge blocked Biden's order.

Borrowers who have not yet applied can subscribe for updates by email.

What do voters say?

American voters support debt forgiveness by a narrow margin; about 15% of voters say they could be impacted by the plan, an Economist/YouGuv poll found.

The six Republican-led states that have sued to block Biden's executive order argue he skirted congressional authority and the plan threatens future tax revenues and money earned by state entities that invest in or service student loans.


Deep South states will get the greatest benefits per borrower from the Biden order, New York Federal Reserve research shows, including South Carolina, one of the six behind the lawsuit.

A handful of states may consider the student loan debt that is forgiven as taxable income, financial advisers warn.

Why is U.S. student debt so high?

The cost of higher education has skyrocketed in the United States in the past three decades, doubling at private four-year colleges and universities and rising even more than that at public four-year schools, according to research from the nonprofit College Board. The outstanding balance of student loans nearly quadrupled from 2006 to 2019.

U.S. borrowers hold about $1.77 trillion in student debt, according to the latest Federal Reserve figures. The vast majority of that is held by the federal government.

Biden's student loan forgiveness plan could add $300 billion to $600 billion to the federal debt, economists estimate.


This story was written by one of our partner news agencies. Forum Communications Company uses content from agencies such as Reuters, Kaiser Health News, Tribune News Service and others to provide a wider range of news to our readers. Learn more about the news services FCC uses here.

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