Student Loan Relief Plan Faces Uphill Battle Versus District Court Opposition

When the Biden Administration announced its student loan forgiveness plan, borrowers burdened by this debt rejoiced. Were it enacted, the proposal would bring financial relief to at least 40 million student loan borrowers, especially those who complications of the pandemic have dramatically impacted. This information, and all details regarding it, have been filed this week in the United States Department of Justice’s opening brief.

Specifically, the Income-Driven Repayment (IDR) plans to reorganize student loan payments based on income and family size. More importantly, though, after 20 or 25 years of consistent payments, if any borrower has student debt remaining, all of it will be forgiven, though that amount could be taxable.

Unfortunately, the DoJ must now defend their statements as a Texas federal district court judge ruled the program violates their legislative power. In addition, the 8th Circuit Appellate Court, based in St. Louis, imposed its own injunction. This temporarily paused the program, but the Biden Administration has requested that the US Supreme Court allow it to continue.

Abby Shafroth, staff attorney at the National Consumer Law Center, explains, “[The] debt relief plan is not only lawful, but it also is critical to millions of working- and middle-class Americans who are otherwise at risk of falling behind as they work to recover from the pandemic.”

Also, the director of the Student Loan Borrowers Assistance Project, Shafroth, further details how the plan is designed to provide relief to people disproportionately burdened by student debt. The hope is that this will not only give those people some breathing room but also help the country “avoid a projected wave of student loan delinquencies and defaults when the pause on payment ends.”

Although the broader public seems to be more accepting (and excited) about the measure, more legal filings will likely be processed before the Supreme Court hears oral arguments. That phase of the process will begin in late February. The deadline for submission among those opposed to the measure, in both Texas and th 8th Circuit Court of Appeals, is January 27th, 2023. Following this, the DOJ has until February 15, 2023 to respond.