{"id":4961,"date":"2022-10-21T15:41:14","date_gmt":"2022-10-21T20:41:14","guid":{"rendered":"https:\/\/blogs.luc.edu\/compliance\/?p=4961"},"modified":"2022-10-21T15:41:14","modified_gmt":"2022-10-21T20:41:14","slug":"the-legal-fight-for-student-debt-forgiveness-is-underway","status":"publish","type":"post","link":"https:\/\/blogs.luc.edu\/compliance\/?p=4961","title":{"rendered":"The Legal Fight for Student Debt Forgiveness Is Underway"},"content":{"rendered":"

Sam Schwab\u00a0<\/span><\/i>\u00a0<\/span><\/p>\n

Associate Editor<\/span><\/i>\u00a0<\/span><\/p>\n

Loyola University Chicago School of Law, JD 2024<\/span><\/i>\u00a0<\/span><\/p>\n

 <\/p>\n

In August, <\/span>President Joe Biden announced<\/span><\/a> that his administration would be implementing a one-time student loan debt relief program for Americans with student loan debt. Since the announcement, <\/span>the administration has posted guidance on the Department of Education\u2019s website<\/span><\/a> that explains the plan in detail and attempts to answer some FAQs. <\/span>The website outlining the plan<\/span> states that $10,000 worth of debt would be forgiven for Americans making less than $125,000 a year who have outstanding federal student loans. For those who received Pell Grants to pay for college, up to $20,000 worth of student loan debt would be forgiven. The <\/span>website states that \u201cthe Administration will launch a simple application in October\u201d<\/span><\/a> that must be completed by the end of the year to determine whether borrowers qualify for debt forgiveness. That application is now available on the Federal Student Aid website. <\/a><\/span>\u00a0<\/span><\/p>\n

The President\u2019s authority to enact debt forgiveness<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n

In his announcement, the President said that he was acting with \u201c<\/span>the authority Congress granted the Department of Education<\/span><\/a>.\u201d According to a <\/span>legal opinion given by the Department of Justice<\/span><\/a>, the authority that President was referring to is known as the HEROES Act, which President George Bush signed after 9\/11 to <\/span>\u201calleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.\u201d<\/span><\/a> The national emergency under which President Biden now enacts student debt relief is the COVID-19 pandemic. <\/span>In recent weeks, at least three lawsuits have challenged<\/span><\/a> the proposal, in part on the basis that Congress never intended to grant President Biden the authority to regulate student loan debt under these circumstances. During the Trump administration, however, <\/span>the Department of Education moved to freeze student loan payments and interest accruals in response to the pandemic<\/span><\/a>, and the Biden administration rightly pointed that no such lawsuits were filed against the Trump administration. Nevertheless, <\/span>the current Administration has adjusted its plan<\/span><\/a> in response to legal attacks from conservatives. <\/span>\u00a0<\/span><\/p>\n

Lawsuit from six Republican attorneys general <\/span><\/b>\u00a0<\/span><\/p>\n

The first lawsuit<\/span><\/a> was filed by the Republican attorneys general of Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina. The lawsuit centers around Federal Family Education Loans (FFEL) and Perkins loans \u2013 both of which are serviced by private banks and ensured by the Federal government. The lawsuit alleges that the Biden plan, which it refers to as \u201cMass Debt Cancellation\u201d over 80 times in the <\/span>complaint<\/span><\/a>, harms the individual states because the plan would hurt the private loan servicers whom the states have authorized to service the Perkins and FFEL loans. For example, Missouri is home to <\/span>MOHELA, which stands for \u201cMissouri Higher Education Loan Authority<\/span><\/a>.\u201d MOHELA is created<\/span> by Missouri statute<\/span><\/a> to service FFEL and Perkins loans and is <\/span>one of the largest student loan servicers<\/span><\/a> in the United States.\u00a0<\/span>\u00a0<\/span><\/p>\n

When the debt forgiveness plan was first announced, the U.S. <\/span>Department of Education\u2019s website said that FFEL and Perkins loan borrowers were eligible for debt relief<\/span><\/a> if they consolidated their loans into Direct Loans serviced by the U.S. Department of Education. The Department has since directly changed this language <\/span>on its website<\/span><\/a>. Under the FAQ question \u201cAre Federal Family Education Loan (FFEL) Program loans or Perkins Loans eligible for debt relief?,\u201d the answer now states that “As of Sept. 29, 2022, borrowers with federal student loans not held by [the Department of Education] <\/span>cannot<\/span><\/b> obtain one-time debt relief by consolidating those loans into Direct Loans.” <\/span>It is estimated that this change will now exclude \u201croughly 800,000 borrowers\u201d from obtaining student debt relief.<\/span><\/a>\u00a0 While it is not clear that the lawsuit has caused the administration to change course in this way, <\/span>a statement provided by the administration to NPR<\/span><\/a> suggests that it may not consider canceling FFEL and Perkins loan debt as a \u201clegally available option.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

Other lawsuits and resources for borrowers<\/span><\/b>\u00a0<\/span><\/p>\n

Two other lawsuits have been filed against the plan \u2013 <\/span>one by the Arizona Attorney General<\/span><\/a>, and another by <\/span>a taxpayer from Indiana<\/span><\/a>. Each of these lawsuits may come down to whether the parties suing have \u201cstanding.\u201d \u201cStanding\u201d is a court\u2019s determination that the person who is suing has been harmed in a concrete way. If the court finds that the party suing has been harmed in a concrete way, then the courts are allowed to step in. <\/span>As the Arizona Attorney General has conceded, standing, while not a complete barrier, is in fact a \u201cmajor hurdle<\/span><\/a>.\u201d\u00a0<\/span>\u00a0<\/span><\/p>\n

In closing, while the administration is certainly proceeding with its plan to forgive student loan debt, it appears as though its efforts may be watered down by various conservative lawsuits. It is no secret that conservatives have long opposed student debt forgiveness. However, the fact that conservatives did not so strongly oppose President Trump\u2019s freeze on tuition payments and other assistance to borrowers appears to show that their attacks on the Biden administration\u2019s efforts are out of partisan reaction and spite.<\/span>\u00a0<\/span><\/p>\n

If you yourself are attempting to have your student loan debt forgiven, <\/span>check the Federal Student Aid website<\/span><\/a> for the information. For more resources pertaining to student loan debt forgiveness, <\/span>you can visit the Department of Education\u2019s online one-pager on the plan<\/span><\/a>.\u00a0<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

In August, President Joe Biden announced that his administration would be implementing a one-time student loan debt relief program for Americans with student loan debt. Since the announcement, the administration has posted guidance on the Department of Education\u2019s website that explains the plan in detail and attempts to answer some FAQs. The website outlining the plan states that $10,000 worth of debt would be forgiven for Americans making less than $125,000 a year who have outstanding federal student loans. For those who received Pell Grants to pay for college, up to $20,000 worth of student loan debt would be forgiven. The website states that \u201cthe Administration will launch a simple application in October\u201d that must be completed by the end of the year to determine whether borrowers qualify for debt forgiveness. That application is now available on the Federal Student Aid website.<\/p>\n","protected":false},"author":122,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[277,278,591,592,687,694,695,1342,1615,1711,1713,1904,1905,1906],"class_list":["post-4961","post","type-post","status-publish","format-standard","hentry","category-finance-banking","tag-biden","tag-biden-administration","tag-democratic-party","tag-democrats","tag-education","tag-election","tag-elections","tag-midterms","tag-president-biden","tag-republican-party","tag-republicans","tag-student-loan-debt","tag-student-loan-debt-forgiveness","tag-student-loans"],"_links":{"self":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/4961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/users\/122"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4961"}],"version-history":[{"count":0,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=\/wp\/v2\/posts\/4961\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.luc.edu\/compliance\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}