Student Loan Forgiveness on the Docket
Recently, the Supreme Court announced it will hear a case in February that will determine the future of President Joe Biden’s stalled federal student debt relief program.
Federal student loan debt is a big financial burden for many Americans, with more than $1.6 trillion outstanding in 2022 – and only growing larger as college fees and college attendance increases. The average monthly student loan payment for people with bachelor’s degrees now stands at $234.
At least 26 million borrowers have already applied for the program, which would forgive up to $20,000 depending on factors like income.
But President Biden’s debt relief proposal was implemented via executive order, and that may violate the Constitution. In a court ruling putting a hold on the program, U.S. District Judge Mark Pittman called it an "unconstitutional exercise of Congress's legislative power."
There’s also the matter of cost – forgiving student loans isn’t cheap. The nonpartisan Congressional Budget Office estimated that the plan would cost roughly $400 billion.
The Biden administration has argued that without the plan, there will soon be a historic increase in the number of borrowers defaulting on their loans.
In the meantime, the Supreme Court will continue the injunction put in place by the Eighth Circuit Court of Appeals that has kept the debt relief program on ice.