Title: Ongoing Lawsuits Challenge President Biden’s Student Loan Policies
In a series of ongoing legal challenges, lawsuits have been filed against President Joe Biden’s student loan policies, raising concerns about the future of debt relief programs. The controversial decisions made by the Supreme Court and the US 5th Circuit Court of Appeals have ignited a battle over the fate of student loan forgiveness and borrower protections.
Back in late June, the Supreme Court dealt a blow to President Biden’s major student loan forgiveness program by blocking its implementation. The decision left many student loan borrowers disappointed and uncertain about the future of their debt relief hopes.
Adding to the complexity, the US 5th Circuit Court of Appeals recently issued a temporary block on the new provisions of the borrower defense rule. These provisions include automatic debt discharges and a ban on mandatory arbitration. Career Colleges and Schools of Texas have urgently requested an emergency injunction to stop these new provisions from taking effect. The case is set to be heard on November 6.
While these legal battles continue, affected student loan borrowers can still submit applications for debt relief. However, the Department of Education will not process these applications under the new regulations until the lawsuits are resolved.
Another lawsuit, filed just last week by conservative groups, aims to halt the Biden administration’s plan for a one-time adjustment to borrowers’ accounts. This adjustment seeks to accurately count payments made previously under an income-driven repayment plan. As a result, around $39 billion worth of federal student loan debt would be cancelled for approximately 804,000 borrowers. The lawsuit argues that this adjustment is both substantively and procedurally unlawful, similar to the Supreme Court-blocked forgiveness program.
The Department of Education had originally planned to notify eligible borrowers about the forthcoming debt cancellation. The one-time adjustment was designed to assist borrowers whose payments were miscounted, ensuring they receive the debt relief they are entitled to. The Department defended the adjustment as necessary for fairness and accountability.
It is important to note that these legal challenges currently do not impact the new income-driven repayment plan known as SAVE, which the Biden administration has proposed. The SAVE plan is expected to reduce borrowers’ monthly bills by 50% and eventually cancel any remaining debt after at least 10 years of payments.
As the lawsuits continue to unfold, the fate of student loan policies remains uncertain. The decisions made in these cases will have a significant impact on millions of borrowers and could shape the future of student loan forgiveness and relief programs. Female Arts will closely monitor this ongoing legal battle and provide updates as further developments unfold.
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