Melissa N. Osika, MBA
A lot has happened with student loan forgiveness in the US. In fact, the movement surrounding the topic started over a decade ago! Here, we provide a brief timeline of events that have happened over the past year or so regarding student loan forgiveness.
President Joe Biden was inaugurated into office on January 20, 2021. According to Politifact, a website by the Poynter Institute, one of Biden's promises was to forgive student loan debt from public colleges and universities. His exact promise when running was to "forgive all undergraduate tuition-related federal student debt from two- and four-year public colleges and universities and private HBCUs and MSIs for debt-holders earning up to $125,000."1
In August 2022, President Joe Biden announced that he would cancel $10,000 per borrower and $20,000 for Pell Grant recipients. The loan forgiveness was limited to Americans earning under $125,000 per year, or $250,000 for married couples. The relief was also capped at the amount of a borrower's outstanding eligible debt.2,3,4
After this announcement, six states (Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Caroline) sued President Biden and the Department of Education, claiming that Congress had never approved massive student loan cancellation and that the Biden Administration and the US Education Department misused their emergency authority. They argued that the administration improperly used the HEROES Act, a 2003 law that "vests the Secretary of Education with expansive authority to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies."5,6
For the next month or so, various other parties sued the Department of Education and President Biden, including the Brown County Taxpayers Association in Wisconsin, college graduates Myra Brown and Alexander Taylor, and the Cato Institute.
On October 17, 2022, student loan forgiveness applications opened, despite rising legal challenges.
In October, the Supreme Court dismissed the six states' lawsuit, saying it lacked standing. Shortly after, the 8th Circuit Court of Appeals in St. Louis gave an emergency order temporarily blocking the forgiveness plan after the six states appealed the decision.7,8
Throughout October and November, there were various appeals and dismissals from both sides and on November 11, the Department of Education stopped accepting student loan forgiveness applications. As of December 2022, the message on StudentAid.gov currently reads "Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications. We are seeking to overturn those orders."9
On November 22, the student loan repayment pause was extended to June 2023, or until the debt relief program is implemented or the litigation is resolved.
There's no telling what will happen with student loan forgiveness in 2023, but we can be sure that most Americans will continue to stay updated on the developments in the coming months..
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