President Joe Biden's plan to waive student loan debt for people making less than $125,000 or families earning less than $250,000 annually has faced an uphill battle since his Aug. 24 announcement.
The Justice Department has said that Biden's action is allowable under a 2003 law, known as the Higher Education Relief Opportunities for Students (HEROES) Act, which authorizes the executive branch to overhaul student loan programs. Enacted after the 9/11 terrorist attacks, the HEROES Act gave the president the right to cancel student debt during a national emergency.
But several legal challenges have stalled Biden's plan.
Frank Garrison is an attorney who borrowed money to finance his education and works for Pacific Legal Foundation, a conservative public interest law firm in California. He sued the Biden administration Sept. 27 alleging that the executive branch does not have the authority to create a new forgiveness policy and is overreaching Congress' power to make the laws.
A federal judge denied the motion for lack of standing. The judge said that because the federal program is not compulsory, it will not harm Garrison and the other plaintiff in the lawsuit.
In a separate lawsuit filed Sept. 29 in U.S. District Court, Arizona attorney general Mark Brnovich alleged that the Biden administration's use of the HEROES Act to cancel student debt is unconstitutional and unjustified. The case is ongoing.
Six states — Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina — also filed a joint lawsuit Sept. 29 asking a court to block the Biden administration's loan forgiveness program immediately.
The complaint said that Missouri's state-run student loan servicer could lose revenue if borrowers consolidate their loans under the Federal Family Education Loan program, among other harms to other states. A federal judge in Missouri dismissed the case for lack of standing, but the states appealed. The 8th Circuit U.S. Court of Appeals approved the states' request Oct. 24 for an emergency stay to block the program, pending appeal.
The Biden administration is responding to several other lawsuits to block the student debt cancellation; those additional challenges also argue that his move is unconstitutional and violates federal procedures by denying borrowers the opportunity to submit public comment.
On Nov. 10, District Judge Mark T. Pittman in Texas called Biden's plan a "complete usurpation" of congressional authority by the executive branch and rejected the Biden administration's arguments that it has authority to act under the HEROES Act. Pittman temporarily halted the program.
The Justice Department appealed Pittman's ruling.
It also issued an emergency appeal to the U.S. Supreme Court Nov. 18, asking the high court to reverse the nationwide injunction or to take up the case and set an expedited briefing schedule for the court's current term.
That 40-page filing by U.S. Solicitor General Elizabeth Prelogar marks the third time in less than a month that the justices have been asked to intervene in disputes over the program.
In response to the legal challenges, the Department of Education has scaled back the debt relief program.
The administration previously said borrowers with privately owned federal student loans, including Federal Family Education Loan (FFEL) and Perkins Loans, could consolidate their loans into federal Direct Loans made directly by the Department of Education. It said this would qualify those borrowers for relief under Biden's cancellation program, giving people a path to receive up to $10,000 or $20,000 of loan forgiveness.
That changed Sept. 29, when the administration said borrowers with federal student loans not held by the Department of Education "cannot obtain one-time debt relief by consolidating those loans into Direct Loans," according to the department's website.
The Biden administration is accepting and reviewing debt relief applications amid the ongoing lawsuits. The White House said Nov. 3 that close to 26 million people had applied to be considered for debt-relief. About 16 million people have been approved for loan cancellation, but the administration can't forgive the debt until legal challenges are resolved.
The Department of Education Nov. 22 extended a pause on student loan payments that were set to resume Jan. 1. Monthly student loan payments are scheduled to restart 60 days after litigation is resolved or the administration is able to implement debt relief, whichever comes first. If courts have not weighed in by June 30, monthly payments will resume 60 days after June 30, the department said.
Several lawsuits have been filed in courts across the country, halting Biden's plan to forgive student debt for millions of borrowers. We'll continue to monitor this pledge, but for now, we rate it Stalled.