Student Loans: Supreme Court Denies Block of Biden’s Forgiveness Plans, So Why Is it Still on Pause?

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The Supreme Court has now denied another emergency application to block federal student loan forgiveness. Since the announcement of Biden’s initiative to cancel $10,000 in student loans for most borrowers (and up to $20,000 for those who received Pell Grants), six lawsuits have threatened the plan.

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On Nov. 1, Justice Amy Coney Barrett rejected an attempt to block the program launched by the Pacific Legal Foundation on behalf of two borrowers in Indiana, CNBC reported. The two plaintiffs claimed they would be financially harmed if some debt was canceled because they would incur state taxes on the forgiven student loan debt. A similar request was dismissed on Oct. 20.

While these attempts have little effect, student loan forgiveness is still on hold due to a challenge by six Republican-led states. The six states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — claimed a lack of congressional authorization for the administration’s action. CNBC reported that the Eighth Circuit Court of Appeals issued a stay and paused the program while it considers the appeal.

Roughly 26 million Americans have applied for student loan forgiveness, and the Biden administration has approved 16 million of the requests, the White House said on Nov. 3. For now the Biden administration, says it will hold the applications of borrowers who have already applied until further notice, according to CNBC.

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Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, told The Hill that borrowers will “have a decision” from the Eighth Circuit soon. Legal experts also explained that the court’s determination could be key as to whether the Biden administration will be allowed to provide relief to federal student loan borrowers.

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Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.
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