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    • Here’s who could benefit from Biden’s student loan forgiveness program after the court victory
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    Here’s who could benefit from Biden’s student loan forgiveness program after the court victory

    Caradoc Wyn Posted on

    Topline

    A federal judge ruled Wednesday that the Biden administration can restart its student loan forgiveness program — paving the way for completion of the program that would ultimately forgive student loan debt for more than 25 million Americans three months before he leaves office .

    Important facts

    U.S. District Judge Randal Hall issued the ruling Wednesday, finding that Georgia was an inappropriate venue for the case because the state failed to show it would suffer sufficient harm from the program and that it was better suited to Missouri .

    Hall’s ruling allows the expiration of a preliminary injunction he previously imposed on the program while the case went through the court process – and which prevented the Biden administration from finalizing the rule.

    The program would partially or completely forgive the debts of borrowers whose debts exceed the original amount borrowed after interest; those with loans older than 20 or 25 years; those who participated in job training programs that resulted in high debt or low income; and those who are eligible for forgiveness programs but never applied.

    Approximately 25 million borrowers with interest up to $20,000, single borrowers earning less than $120,000, and married couples with combined income less than $240,000 who participate in income-driven payment plans could be eligible under the program, all interest will also be waived.

    Big number

    $147 billion. That’s how much the Biden administration estimates the program will cost over the next decade.

    What you should pay attention to

    The states asked a federal court in Missouri on Thursday to impose a temporary restraining order against the program while they pursue the lawsuit.

    Important background

    Seven Republican-led states – Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio – filed the lawsuit in Georgia, arguing the government illegally ordered loan servicers to begin repaying debt before the rule was in effect this fall force should come into force. The lawsuit also alleges that the Biden administration planned to begin issuing loans immediately as soon as the rule took effect, even though federal law requires a 60-day buffer period after implementation. Missouri also argued that the quasi-governmental government agency that administers federal student loans and state grants would lose revenue under the program. The program was the second iteration of Biden’s student loan forgiveness program after an earlier plan to forgive up to $20,000 for more than 40 million borrowers was rejected by the Supreme Court last year.

    Main critic

    “Today’s court decision is a small victory for democracy. This Missouri AG case is as absurd as it is dangerous. “The Biden-Harris Administration’s Plan B is both legal and necessary to provide vital relief to over 30 million Americans trapped in a cycle of unaffordable debt,” the nonprofit Student Borrower Protection Center said in a statement warned that legal challenges were likely to continue.

    Further reading

    Biden To Forgive Another $1.2 Billion In Student Loan Debt: Here’s Who Qualifies (Forbes)

    Biden cancels $1.2 billion in student loan debt – who will benefit (Forbes)

    Biden Reveals New Details on Plan B for Student Loan Forgiveness (Forbes)

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    Caradoc Wyn
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