Student Loan Debtors May Still Paying When Biden Wins His Lawsuits
Student Loan Debtors May Still Paying When Biden Wins His Lawsuits

Student Loan Debtors May Still Paying When Biden Wins His Lawsuits

It is possible that borrowers will not see instant relief even in the event that the Supreme Court rules in favor of Biden’s plan to cancel student loans. This will depend on the actions that the court authorizes.

If it does not decide to reverse the loan forgiveness, the court has two further choices. The first choice would involve ongoing litigation in lower courts, which would cause borrowers to have to wait longer for relief, whereas the second choice would result in quick forgiveness.

This adds another another level of ambiguity for the millions of borrowers who may already be perplexed about how to proceed with their student loans. The fact that the court could give a verdict as early as March further complicates the situation; nonetheless, analysts do not anticipate a ruling before the end of May or early June at the earliest.

“If the Court finds plaintiffs have no standing, then they would vacate the injunction in the Texas case and lift the stay in the 8th Circuit case, and remand for further proceedings. This was just at the preliminary injunction stage, so there will potentially be further stages and further arguments,” Jeffrey Dubner, the deputy legal director at Democracy Forward, said in a media scrum after oral arguments on Tuesday. “Or, the Court could direct the courts below to dismiss the case altogether.”

In The Event That Plaintiffs Do Not Have Standing

One of the questions that will be considered by the court is whether or not the parties who are contesting the debt relief plan have the legal right to have their complaints heard.

In the case of Biden v. Nebraska, which is currently being heard by the 8th Circuit Court of Appeals, the Department of Justice argues that the state of Missouri does not have the legal right to sue on the basis of the potential harm that the loan forgiveness program may bring to the Missouri Higher Education Loan Authority (MOHELA), which is a loan servicer in the state. This is due to the fact that MOHELA is a separate entity from the state, and therefore, harm to MOHELA is not the

Two borrowers with outstanding student loans from the state of Texas have brought the case known as Department of Education v. Brown. One of the borrowers is ineligible for loan forgiveness, while the other is eligible for a cancellation of some of their debt.

They contended that the Education Department should have gotten approval from Congress before moving forward with its plan, and that they should not have been denied the opportunity to comment on the terms of the plan. In order for them to have legal standing, however, they will need to demonstrate that they will suffer a particular loss in the event that pardon is granted but they receive only some form of remedy.

In the event that the Supreme Court decides that these cases do not meet the requirements for consideration and remands them for further proceedings, as suggested by Dubner, debt relief will not be granted automatically, and borrowers will be required to wait until the cases are heard by the lower courts for fact discovery.

Advocates have previously brought up the fact that these cases were pushed through the judicial process all the way to the Supreme Court without any fact-finding being done in the lower courts.

“We’ve skipped through every step of the normal judicial process — no finding of fact by a trial court — to a rapid and hasty rush to get this policy in front of a conservative Supreme Court,” Mike Pierce, a former senior regulator, attorney, and executive director of Student Borrowers Protection Center (SBPC), said at a town hall.

Student Loan Debtors May Still Paying When Biden Wins His Lawsuits
Student Loan Debtors May Still Paying When Biden Wins His Lawsuits

In the event that the Supreme Court decides to throw out the cases,

If it decides that loan forgiveness should be granted, the court has an additional possibility available to it that would have an immediate effect on borrowers. If both of these challenges are thrown out by the court, then the Education Department will be able to resume processing applications that have been authorized and will also be able to reopen the website portal for loan forgiveness applications.

After filling out the form, the Education Department previously stated that students ought to obtain debt relief “in a matter of weeks,” and it intended to process the majority of claims by the middle of November.

Over the few short weeks that the application for loan forgiveness was accessible, more than 26 million people submitted requests for cancellation. Before the Education Department decided to halt accepting new applications as a result of the litigation, it had already given its complete approval to more than 16 million of those applications. According to calculations made by the White House, its student debt relief plan could help more than 40 million students who are currently in debt.

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What The Debtors Need To Do At This Time

As a direct response to the litigation, Vice President Biden has decided to prolong the temporary halt to payment on federal student loans until June 30. In the event that the dispute is not settled by that time, compensation will begin sixty days after that point.

Borrowers should check their accounts at the Federal Student Aid (FSA) website to ensure that their contact information is up to date and to learn who their loan service provider is. In the meantime, this information can be found here. It’s possible that their provider has switched since the beginning of the pandemic, when the forbearance policy was first implemented.

Also, borrowers need to be wary of con artists. The Federal Student Aid website is the only place where one can submit an application for student loan forgiveness; however, applications are not presently being accepted. Verify the information provided in any communication that claims to be from your new loan servicer by visiting the website maintained by the FSA before entering any personal information.

Borrowers should also refrain from consolidating their student loans into private loans for the time being. Doing so would render them ineligible for the student loan forgiveness program proposed by Joe Biden, should it be upheld, as well as the one-time adjustments to account payment histories that are intended to bring borrowers closer to meeting the requirements for forgiveness under income-driven repayment plans. That will take place during the course of the spring and summer.

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About Sam Houston 1811 Articles
Hello, I'm Sam Houston, and I'm proud to be a part of the team as a content writer. My journey into journalism has been quite an exciting ride, and it all began with a background in content creation. My roots as a content writer have equipped me with the essential skills needed to craft engaging narratives and convey information effectively. This background proved invaluable when I decided to make the transition into journalism. The transition allowed me to channel my storytelling abilities into producing news articles that not only inform but also captivate our readers.

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