Student Loan

Is Biden’s Student Loan Forgiveness Plan Legal?

This article contains all the information you need to know about the Biden’s Student Loan Forgiveness Plan, its requirements, and how to apply for it.


Millions of Americans welcomed President Joe Biden’s August statement that he would forgive up to $20,000 in student loan debt. 

This joy, however, might not last for long for one simple reason: according to certain legal experts and political opponents, Biden’s idea might not be legitimate.

However, this raises questions on the Biden student loan forgiveness plan such as who, specifically, and why is the legitimacy of loan forgiveness being contested? 

Will the promised debt relief for Americans actually materialize?

Check out also: How Does Student Loan Forgiveness in CT Work? Repayment Program

President Biden Unveils Plan to Forgive Student Loan Debt in 2023

Biden pledged to forgive some of the debt owed on student loans during his 2020 presidential campaign. 

He adhered to his word and in August announced the cancellation of up to $20,000 in Pell Grant-eligible loans and up to $10,000 in non-Pell Grant-eligible loans. 

People must earn less than $125,000 annually to be eligible. 

Under $250,000 must be the bar for married couples filing jointly. 

Also qualified for debt relief are parents who have PLUS loans. 

Only loans from the federal government are covered under Biden’s proposal; private loans are excluded.

According to a White House fact sheet, up to 43 million borrowers might receive relief from the plan, and roughly 20 million people would have their entire outstanding balances canceled. 

Also, according to projections from the White House, people making less than $75,000 a year will benefit from 90% of the debt reduction.

Read also: Guide To Central Research Student Loan: All You Need To Know

But Is Biden’s Plan Legal in 2023?

Biden agreed to forgive a portion of loan debt, but he felt that his authority to do so by executive action was “ambiguous,” thus he preferred congressional legislation to address the debt crisis. 

However, a report from Harvard Law School in 2020 came to the conclusion that the president can actually order the secretary of education “to generate and to cancel or alter debt due under federal student loan programs.” 

The Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which gives the secretary of education “extensive authority to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies,” served as the basis for the Biden administration’s justification for debt cancellation.

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After the terrorist attacks on September 11, 2001, the bill was passed. 

What “national emergency” justifies this course of action? the COVID-19 pandemic, which was declared to be one in March 2020 by the Trump administration. 

Critics assert that it would be excessive to use the Heroes Act to erase student loan debt. 

Biden is on “very, very weak legal grounds right now,” according to Arizona Attorney General Mark Brnovich, who has pledged to sue the president’s plan alongside other Republican attorneys general from Missouri and Texas.

Leslie Rutledge, the attorney general of Arkansas, stated on the Fox Business Network that she was “ready to join with other attorneys general, or if I have to go alone, to take action against President Biden’s newest executive order in reference to student loan forgiveness.” 

See also: How to Apply for Student Loan Forgiveness in Illinois | Review

Notably, some legal authorities also concur. 

Jed Shugerman of Fordham Law School criticized the Biden administration for using the Heroes Act as justification for loan forgiveness. 

President Biden allegedly undercut his legal argument for using the Heroes Act by asserting that the pandemic is over, according to Washington Post columnist Marc Thiessen. 

In an interview with “60 Minutes,” Biden declared, “We still have a COVID problem. “We’re still working really hard on it. The pandemic has ended, though.”

There is no “legal basis for utilizing it to cancel student loans” if there isn’t an ongoing pandemic, claims Thiessen. 

Additionally, according to Thiessen, the statute was created to stop Americans serving in the military during times of national emergency from defaulting on their student debts. 

There is no way to interpret this rule in such a way as to warrant debt relief for a whole class of people who never wore the uniform, Thiessen wrote. 

He is “driving a steam engine straight through the plain letter of the law” by forgiving large amounts of debt for those who did not participate in any way in a national catastrophe and using the pandemic as an excuse.

The Heroes Act has also been used by the Department of Education to justify delaying student loan repayments since 2020, a move whose legality has not yet been contested.

Read also: Student Loan Forgiveness: Taxable or Tax-Free? | Review

Who Has the Standing to Sue?

There needs to be a lawsuit to contest the validity of Biden’s scheme. 

A person must have what is known as “standing to sue,” having suffered some sort of harm or injury. 

Ilya Somin of George Mason University identifies three hypothetical litigants who might launch a lawsuit in his article for “The Volokh Conspiracy,” a blog on the Reason website written largely by law academics. 

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Check also: How to Apply for Student Loan Forgiveness in Virginia |Review

Congress is one example of this. 

The executive branch was denying Congress its “constitutionally vital legislative duty,” according to the House or Senate, which might then file a lawsuit for violation of the Appropriations Clause. 

Such action is improbable given that Democrats currently control both the House and the Senate, but the upcoming midterm elections may change the political climate.

Colleges that do not take federal financing, including student loans, are potential additional claimants. 

According to this reasoning, colleges that do take student loans are now relatively less expensive alternatives, making them less competitive with other educational institutions like Grove City College and Hillsdale College. 

Eugene Kontorovich, a colleague of Somin’s at George Mason University, thinks that states would sue on behalf of public colleges, claiming that loan forgiveness deters students from attending an affordable in-state university.

But in both instances, it seems that this reasoning only applies if student loan forgiveness may take place in the future because students who would be eligible for benefits under Biden’s plan have already chosen their courses of study. 

Somin points out that student loan servicers, who collect payments for student loans on behalf of the government, represent a more probable scenario. 

Also, President Biden’s student loan forgiveness might lead to lower payments, which would lower the fees these service providers charge. 

According to Fordham’s Shugerman, “My guess is that one of these private banks will go to a Federal District Court with a favorable judgment, and there will be a countrywide injunction that blocks this scheme from being implemented.”

Read more: Everything you need to know before you apply for ECMC Student Loan

Notably, The plaintiff has apparently come forward. 

Biden’s student loan forgiveness plan is being challenged in court since he will be taxed on the amount that is forgiven, according to Frank Garrison, a public interest attorney for the conservative Pacific Legal Foundation in Indiana. 

One of the states that intends to tax the amount of the loan that has been forgiven is Indiana. 

Garrison is making an effort to have his school loans forgiven through the Public Service Loan Forgiveness program, which has no associated tax penalty. 

Also, Garrison must pay more than $1,000 in taxes as a result.

Mark Joseph Stern warns that if the Biden administration provides an opt-out mechanism for the 8 million persons who have previously qualified for loan forgiveness based on income, the plaintiff’s legal standing may be lost (Garrison is one of them). 

  How to Apply for a Limited Waiver for Student Loan Forgiveness

The Pacific Legal Foundation, according to Stern, “has handed the Biden administration a blueprint to defeat its own litigation” by bringing this lawsuit forward before the plan’s specifics have been decided.

Also, see: Guide to Student Loan Forgiveness in Indiana

Experts Warn The Public Not to Bank on Debt Reduction

Applications for loan forgiveness will be made accessible, according to the Department of Education, sometime in October. 

The Wall Street Journal forecasts that Republicans will launch legal challenges as soon as that process gets underway. 

Shugerman thinks there’s a chance that this case will end up before the U.S. Supreme Court, which might not support the administration’s use of the Heroes Act to support loan forgiveness. 

He told The Washington Post that if they persist in using this line of reasoning and interpretation of the law, “it is likely that they would lose 6 to 3 and it’s possible that they may lose by more than 6 to 3.” 

“I anticipate that the courts will properly invalidate this good policy within the law.”

However, it can take some time. 

What happens if some loan debt has already been erased by then, barring any legal maneuvers to obstruct progress? 

Could the Department of Education try to repack the toothpaste in its original container? 

It will be difficult to get the money back once it leaves the building, according to Arizona Attorney General Brnovich. 

While everything will work itself out in the ensuing months, experts caution borrowers hoping to take advantage of loan forgiveness not to get their hopes up too high.

The possibility that blanket student loan forgiveness will be preserved within the president’s authority is doubtful, according to Lanae Erickson, senior vice president for social policy, education, and politics at The Third Way, who was quoted in The New York Times. 

It is the responsibility of the campaigners and lawmakers who campaigned for this unprecedented action to also let borrowers know that there is a good risk it won’t happen.

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The majority of student loan holders won’t be able to rest easy straight away, even if Biden’s plan is upheld in court in the event that one arises. 

You will need to file an application to be eligible for student loan cancellation by President Biden, which is anticipated to be accessible by early October 2022, if you are not one of the 8 million persons for whom the Department of Education already has income information. 

Within four to six weeks of submitting this application, you should get your student debt relief.


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