Student Loan Forgiveness Blocked For Now Due to Court Ruling Kiplinger Kiplinger is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Here's why you can trust us.

Student Loan Forgiveness Blocked For Now Due to Court Ruling

For now, a Texas federal court ruling has caused the Biden administration to block new applications for student loan forgiveness. (opens in new tab) (opens in new tab) (opens in new tab) Newsletter sign up Newsletter (Image credit: Getty Images) By Kelley R. Taylor published 11 November 2022 President Biden's student loan forgiveness application officially launched last month and millions of borrowers have already applied for student loan debt relief. But, as you may have heard, Biden's plan to forgive up to $20,000 of student loan debt for eligible borrowers is currently facing several legal challenges. The plan is currently temporarily blocked by the 8th Circuit Court of Appeals and most recently, a federal judge in Texas has ruled that Biden's student loan forgiveness program is unconstitutional. As a result, the Biden administration is not currently accepting new applications for student loan debt relief. However, if you have already applied for student loan forgiveness, a Biden spokesperson says they will hold onto your application, while the case proceeds through the courts. The Texas ruling and the temporary court pause and other legal disputes over student loan forgiveness will delay the processing of student loan relief applications, at least for a while. But the Biden administration had previously said that you can still submit your student loan debt relief application-if you haven't already. But now, the application website is blocked until further notice. So, here's some information on the legal challenges and on the student loan forgiveness application to help you know what to expect.

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Texas Court Ruling Blocks Student Loan Forgiveness--For Now

A federal judge in Texas has ruled that Biden's student loan forgiveness program is unconstitutional essentially because the judge believes that the program is an illegal overreach of Presidential power. Legally speaking, the Texas ruling vacates Biden's student loan forgiveness plan, but it's important to know that for now, that doesn't actually change the current situation with student loan forgiveness. That's because the student loan forgiveness was already on hold due to another court order that temporarily blocks the federal government from forgiving student loans. The Texas ruling though, is the latest in a string of challenges that have been mounted against Biden's student loan forgiveness program in the last couple of months that you should be aware of. And it may be the most significant lawsuit so far. So, what does the Texas judge's ruling about student loan forgiveness mean for you? The Biden administration had previously said that you could apply for student loan forgiveness if you haven't already done so. But because of this ruling, the application for student loan forgiveness is blocked until further notice. That means that the federal government won't be accepting new applications for now and won't be forgiving any student loan debt for now. It's important to note that litigation takes time. And so far, although a federal judge has ruled against the program this week, there's a way to go with legal appeals before we'll have the final word on the constitutionality of Biden's student loan forgiveness plan. For example, U.S. Supreme Court Justice Any Coney Barret has twice rejected appeals in other cases that asked the U.S. Supreme Court to halt Biden's student loan forgiveness program. And, the Justice Department is already appealing the Texas federal court ruling. But the acceptance and processing of student loan applications will be on hold until legal disputes over the program are settled. So that is understandably raising questions and concern about what borrowers can expect when student loan payments resume in January.

Which Other States Sued to Block Student Loan Forgiveness

Last month, in a case separate from the Texas lawsuit, the 8th Circuit Court of Appeals temporarily blocked Biden's student loan forgiveness plan, which means that the Biden administration cannot-for now-cancel student loan debt until the court can consider additional legal arguments from both sides. Six Republican-led states are challenging the program in court, arguing that the Biden's student loan forgiveness would harm student loan companies. The states that are suing to block student loan forgiveness include: Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. The federal court order temporarily pausing student loan debt cancellation has so far delayed the processing of student loan debt relief (i.e., the Biden administration has had to wait a bit to actually cancel student loan debt).

What To Do About Blocked Student Loan Debt Relief

What can you do about your student loan debt relief application? For now, whether you've already applied or not, stay tuned to updates about student loan debt relief. The Biden administration also encourages borrowers to sign up for updates and get information at studentaid.gov.

Some States Will Tax Student Loan Forgiveness Explore More Washington Matters Tax Tips Tax Breaks Paying for College Kelley R. TaylorTax Editor, Kiplinger.comWith more than 20 years experience as an in-house legal counsel and business journalist, Kelley R. Taylor has contributed to numerous national print and digital magazines on key issues spanning education, law, health, finance, and tax. Kelley particularly enjoys translating complex information in ways that help empower people in their daily lives and work. Latest What is ESG? ESG means investing in a way that considers a company's environmental, social, and governance profile. But will ESG help you meet your investment goals and deliver impact? By Ellen Kennedy • Published 11 November 22 This Week in Cannabis Investing: Weed Legalization Gains Ground in Midterms Maryland and Missouri became the two most recent U.S. states to legalize recreational marijuana use. By Morgan Paxhia • Published 11 November 22 You might also like 15 States That Tax Military Retirement Pay (and Other States That Don't) retirement Taxes on military retirement pay vary from state-to-state. How generous is your state when it comes to helping retired veterans at tax time? By Sandra Block • Published 10 November 22 $2.04 Billion Powerball Lottery Jackpot Winner Will Have a Massive Tax Bill The $2.04 billion-dollar Powerball jackpot has its big winner and the federal government will get a big chunk of the prize from taxes. By Kelley R. Taylor • Last updated 11 November 22 New "Stimulus" Check 2022: Massachusetts Tax Refund Money is Being Sent Now Massachusetts will return nearly $3 billion to eligible taxpayers beginning in November. By Kelley R. Taylor • Last updated 9 November 22 What's the Standard Deduction for 2022 vs. 2023? Tax Breaks Most Americans claim the standard deduction on their federal tax return instead of itemized deductions. How much can you claim on your 2022 and 2023 returns? By Rocky Mengle • Last updated 9 November 22 What Are the Capital Gains Tax Rates for 2022 vs. 2023? capital gains tax The capital gains tax rate that applies to a capital gain depends on the type of asset, your taxable income, and how long you held the property sold. By Rocky Mengle • Published 3 November 22 Virginia 2022 "Stimulus" Tax Rebates Many eligible Virginians have received an up to $500 tax rebate check for 2022. By Kelley R. Taylor • Last updated 2 November 22 What Are the Income Tax Brackets for 2022 vs. 2023? tax brackets Depending on your taxable income, you can end up in one of seven different federal income tax brackets – each with its own marginal tax rate. By Rocky Mengle • Last updated 9 November 22 California Stimulus Checks: More Debit Cards Going Out This Week If your last name begins with F to M, a California stimulus payment debit card could be in your mailbox soon. By Rocky Mengle • Last updated 7 November 22 View More ▸ kiplinger About Us (opens in new tab) Terms and Conditions (opens in new tab) Privacy Policy (opens in new tab) Cookie Policy (opens in new tab) Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site.
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