Updated Dec 1, 2022 - Politics & Policy

Where things stand with Biden's student loan forgiveness plan

Student loan borrowers stage a rally in front of The White House to celebrate President Biden cancelling student debt and to begin the fight to cancel any remaining debt on August 25, 2022

Student loan borrowers stage a rally in front of the White House in August. Photo: Paul Morigi/Getty Images for We the 45m

The Biden administration's student loan forgiveness plan is on hold as courts weigh multiple legal challenges against the program, leaving millions of student loan borrowers in limbo.

The latest: The Supreme Court on Thursday declined to lift an injunction temporarily blocking the student debt relief program and agreed to hear the case in February.

State of play: The White House announced last month that it was extending the pause on student loan repayments past the December expiration date and through June 30, 2023.

  • Biden said the extension "would give the Supreme Court an opportunity to hear the case in its current term."

Here's where things currently stand with Biden's student loan forgiveness plan.

Legal challenges
  • Thursday's decision from the U.S. Court of Appeals for the 5th Circuit comes after a federal judge in Texas, U.S. District Judge Mark Pittman, declared the program illegal and struck it down.
  • The Biden administration in a filing appealed the ruling of the Trump-appointed judge.

It has also asked the Supreme Court to intervene in a separate lower court ruling that also blocked the program.

  • In that case, six Republican-led states filed a complaint seeking to overturn the Biden administration's program, saying that the administration overreached.
  • The U.S. Court of Appeals for the 8th Circuit temporarily blocked the program.
Who qualifies for the program
  • The Department of Education released its short online application in October, but it pulled the application offline after millions of borrowers had already signed up due to legal challenges.
  • The Education Department in September tweaked the eligibility of its debt relief program as a result of the legal challenges, Politico reported.
  • The department said that borrowers whose federal loans are privately owned are not eligible for relief. Initially, the administration said that borrowers with privately owned loans could receive up to $10,000 or $20,000 of relief.
  • The plan would cancel up to $20,000 in student debt for Pell Grant recipients and up to $10,000 for individual borrowers who make under $125,000 per year.
Estimated cost of the plan
  • The nonpartisan Congressional Budget Office in September released estimates on the cost of Biden's program, saying that it could total about $400 billion.
  • CBO also estimated that the administration's plan to pause loan repayments through December would cost roughly $20 billion.
  • The Department of Education separately released its own estimates on the cost of the program, saying that it'd cost an average of $30 billion a year over the next decade, with a total of $379 billion for the whole program.

Go deeper... Who student debt relief helps (and it's not who you think)

Editor's note: This story has been updated with additional developments.

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