What’s Next For Student Loan Forgiveness? 2022-23


The fact that there appear to be fresh developments in the struggle for student loan forgiveness every week adds to the confusion. Examining the present state of student loan forgiveness and the next stages

Six lawsuits have been filed in an attempt to block President Biden from canceling student debts. Two of these cases have been dismissed, two more are being heard, and two have been appealed.

Recent Student Loan Forgiveness Status

Claims made by the Pacific Legal Foundation and the Brown County Taxpayers Association were rejected due to a lack of legal standing. There are no pending appeals in these cases.

The Cato Institute and the Arizona Attorney General’s lawsuits are still continuing. In these circumstances, no decisions have yet been taken.

The six state Attorneys General’s complaint was rejected owing to a lack of legal standing, although an appeal is still underway in the 8th Circuit Court of Appeals. While the lawsuit is being reviewed, the court awarded a temporary stay on October 21, 2022, and a preliminary injunction on November 14, 2022.

These restrict the US Department of Education from canceling any federal student loans while still allowing borrowers to request forgiveness. On November 18, 2022, the United States Department of Education filed an appeal with the United States Supreme Court, and the six state Attorneys General responded on November 23, 2022.

The Job Creators Network’s lawsuit against the US Department of Education resulted in a ruling on November 10, 2022, vacating the student loan forgiveness program. Due to this, the U.S. Department of Education is unable to forgive any federal student debts or accept any new loan forgiveness requests.

The application for student loan forgiveness was removed by the U.S. Department of Education. On November 17, 2022, the U.S. Department of Education filed an appeal with the U.S. Court of Appeals for the 5th Circuit.

President Biden’s plan to cancel student loans has been put on hold as a result of these cases, leaving students in uncertainty. Until both appeals are granted, the U.S. Department of Education is not permitted to discharge any loans. Until the Job Creators Network judgment is overturned on appeal, the U.S. Department of Education will not be able to reopen the application for forgiveness. student loan forgiveness

Although 16 million borrowers have been informed that their requests for debt forgiveness have been accepted, the U.S. Department of Education is unable to cancel the student loans while the legal proceedings are ongoing.

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Payment Pause Extension and Interest Waiver

The U.S. Department of Education announced an eighth extension to the payment suspension and interest waiver while appeals are ongoing on November 22, 2022. Activities related to collection are also halted.

Repayment shall begin again 60 days following the conclusion of the legal proceedings or on June 30, 2023, whichever comes first. As a result, the restart of payback will happen between February 1 and September 1, 2023, depending on when the courts determine. Between three and three and a half years will have passed since the interest was waived and payments were suspended.

The U.S. Supreme Court’s current term will come to a close on June 30, 2023. The student loan servicers must give six notifications of the restart of repayment commencing two months prior to the initiation of repayment during the 60-day window.

The fifth and seventh extensions were both referred to as the “last extension,” however the U.S. Department of Education did not designate the eighth extension as the final extension after a twice crying wolf.

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What Is the Future of Student Loan Forgiveness?

Hearings (and subsequent decisions) in the appeals of the cases brought by the Job Creators Network and the six state Attorneys General will likely be the next significant developments in the student debt forgiveness drama.

Additionally, decisions in the litigation brought by the Cato Institute and the Arizona Attorney General may be made. These judgments will probably be challenged.

Republicans in the U.S. House of Representatives may launch a lawsuit to halt President Biden’s student loan forgiveness scheme once the next Congress convenes on January 3, 2023. The president’s proposal breaches the division of responsibilities, the lawsuit will likely contend, and only Congress has the authority to spend public funds.

What Should Borrowers Do?

Borrowers need to wait. They have no control over how the litigation will turn out.

To prepare for the amount they will have to pay once repayment has resumed, borrowers may choose to start setting aside their monthly student loan installments.

This sum of money may be placed in a high-yield savings account. When payments are resumed, they can use the funds to pay down credit card debt, pay off other debt, including student loan debt, or replenish or grow their emergency fund.

Watch out for student loan fraud. Some con artists will demand money in order to speed up your application or help you qualify for a pardon. For the goal of identity theft, some frauds will request your Social Security Number, FSA ID, and other confidential information.

Visit StudentAid.gov or contact your student loan servicer if you have inquiries about the current status of the student loan forgiveness program.


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