Millions of Americans felt a sense of relief in August when President Joe Biden announced his long-promised student loan forgiveness program. It is designed to cancel up to $20,000 in loan debt for borrowers with Pell grants and up to $10,000 for those without them. Some 26 million people have applied for consideration so far, and 16 million have been approved.
The program, which drew immediate criticism from Republicans and prompted multiple lawsuits, is now halted and appears to be in for a difficult slog through the courts. In response to one of the lawsuits, a federal judge has ruled that the program is not legal and ordered it vacated.
Judge ruled the program is unlawful
The Biden administration has already begun work on appealing the ruling. It has argued that it is valid under a law called the HEROES Act, which allows presidents to forgive student loan debt during times of national emergency. They say the events of the past few years qualify as that.
The federal judge disagreed. He said, “In this country, we are not ruled by an all-powerful executive with a pen and a phone. Instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.”
Bankruptcy can still provide relief
However, in the meantime, the U.S. Department of Education has stopped accepting applications. It is holding those it already has. The appeals are expected to take at least weeks. The case moves next to an appellate court and then potentially the U.S. Supreme Court. That leaves many millions of people in a state of limbo.
It’s not easy to qualify to discharge student loan debt in bankruptcy, although members of Congress are working to change that. However, bankruptcy can still help people who are mired in other debt as well. By being able to discharge or renegotiate other types of debt, you can make your student loan debt more manageable. It can be helpful to seek legal guidance to determine the best course of action for you.
