Building on its previous efforts to reduce the cost of federal student loans, the Department of Education (DOE), as directed by the Biden-Harris administration, proposed a new rule on Tuesday, January 10, that would reform the federal student loan repayment process. The draft rule recommends a new income-driven repayment (IDR) plan for federal student loan borrowers in addition to simplifying current repayment programs and shortening the timeline for forgiveness.
As litigation surrounding the Biden-Harris administration’s student debt forgiveness plan persists, the administration announced an extension of the student loan repayment pause through June 30, 2023. In an announcement earlier this year regarding student loan forgiveness, monthly payments were set to resume on January 1, 2023. Now that the loan forgiveness is the subject of litigation, the administration has again paused student loan payments.
Last week, the Department of Justice (DOJ) and the Department of Education (DOE) distributed guidance to the legal community clarifying the process for the discharge of federal student loans in bankruptcy proceedings. The agencies said that the new guidelines will standardize, expedite and simplify the legal process student loan borrowers must undergo to discharge their loans.
On Thursday, November 11, Judge Mark Pittman of the U.S. District Court for the Northern District of Texas released a decision that found the Biden-Harris administration’s Federal Student Debt Relief Plan was unconstitutional.
Late on Friday, October 21, the 8th Circuit Court of Appeals issued a stay of the Biden-Harris administration’s Student Debt Relief Plan while it considers a lawsuit brought by six Republican state attorneys general to block the program. The court announced that it would hear the emergency request levied by Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina on an expedited basis, with briefs from each side due Monday and Tuesday. The court issued the stay after the states sent a notice of appeal to the 8th Circuit Court of Appeals on Thursday night following the denial of their case by U.S. District Judge Henry Autrey.
On Thursday, October 20, the Biden-Harris Administration’s Student Debt Relief Program prevailed in two early legal cases challenging the plan. Justice Amy Coney Barrett denied an emergency bid to obstruct the program from a Wisconsin conservative group, while a federal judge in Missouri dismissed a challenge to the plan by six Republican-led states.
On the afternoon of Monday, October 17, President Biden announced via Twitter and press release that the Department of Education (DOE) has officially launched the application for its Student Debt Relief Plan. Borrowers can access the application in both English and Spanish at studentaid.gov/debtrelief/apply.
On Tuesday, October 11, the Biden-Harris administration and the Department of Education (DOE) provided a preview of the student debt relief application they had announced earlier in the year. Published on the White House’s Twitter account, the teaser revealed that the application will be “short and simple,” available in English and Spanish, and would not require supporting documents nor a Federal Student Aid Identification Number (FSA ID).