Wednesday’s ruling by a three-judge panel of the New Orleans-based court is the latest blow to a plan that has been shadowed by legal doubt since President Joe Biden announced it in August.
Supreme Court keeps student-loan cancellation plan blocked for now
The Supreme Court on Thursday agreed to take up the case in late winter. The court’s decision to hear arguments relatively quickly means it is likely to determine whether the widespread loan cancellations are legal by late June.Read More
Former ITT Tech students get $3.9B in debt cancellation
Students who used federal loans to attend Carmel-based ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain.Read More
Settlement would forgive $6B for defrauded college students
Almost all the schools involved are for-profit colleges. The list includes ITT Technical Institute, which was headquartered in Carmel and shut down in 2016.Read More
Ex-ITT Tech students among thousands to receive $415M in loan cancellations
This is the fourth finding against Carmel-based ITT Tech that has led to the approval of debt relief claims by the department. All told, the evidence has resulted in about $660 million in discharges for roughly 23,000 students.Read More
The future of President Biden’s student loan forgiveness program remains in doubt after a federal appeals court issued an injunction preventing the government from discharging any debt while it considers a lawsuit to end the policy.
A U.S. judge on Thursday blocked President Joe Biden’s plan to provide millions of borrowers with up to $20,000 apiece in federal student-loan forgiveness.
Attorneys for six Republican-led states are asking a federal appeals court to reconsider their effort to block the Biden administration’s program to forgive billions of dollars in student loan debt.
Earlier Thursday, Supreme Court Justice Amy Coney Barrett rejected an appeal from a Wisconsin taxpayers group seeking to stop the debt cancellation program.
The new suit is one of a growing number of legal challenges against the proposal laid out by President Joe Biden in late August to cancel up to $20,000 in debt for certain borrowers.
Hundreds of thousands of borrowers could be shut out of the student debt relief promised by President Biden after the Education Department announced Thursday that privately held loans will not be forgiven.
The lawsuit was filed in federal court in Indiana, one of several states that plan to tax any student debt canceled by President Biden’s plan.
The new cost estimate will add fresh fuel to the debate over President Joe Biden’s decision to cancel up to $20,000 in student debt for eligible borrowers.
Most of those Indiana recipients could have up to $20,000 forgiven because they received Pell Grants, which are provided to students whose families can’t help them pay for college.
Democratic state Rep. Rep. Greg Porter of Indianapolis condemned the policy in a statement Tuesday and said he was drafting legislation to retroactively eliminate state income tax on debt relief.
The Education Department has offered to return money to people who continued to pay since the inception of the moratorium in March 2020, but the policy went largely unnoticed until last week.
Fissures opened instantly within the Democratic Party, as moderates said Biden was doing too much and liberals demanded he do more, while Republicans lined up in adamant opposition to the debt-forgiveness plan.
The plan calls for $10,000 or more in federal loan forgiveness for millions of Americans. Democrats are betting that President Joe Biden, who has seen his public approval tumble over the past year, can help motivate younger voters to the polls with the announcement.
The plan, expected to be revaled Wednesday, would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more.
The group estimated that between 69% and 73% of any debt forgiven would accrue to households that rank in the top 60% of the U.S.’s income distribution.
The likely decision follows months of uncertainty over the fate of student debt for tens of millions of Americans, with Biden at times sounding skeptical of canceling loans but under pressure from his collapsing approval ratings among young voters ahead of November’s elections.
White House press secretary Jen Psaki said Thursday that President Joe Biden was still considering whether to tie debt relief to borrowers’ income levels, an idea he’s floated in the past. She said it’s “certainly something he would be looking at.”
Despite fine-tuning over the years, government audits show the Education Department has provided insufficient instructions to contractors managing its loan portfolio. That oversight has resulted in inconsistent loan servicing to the detriment of borrowers.
The action applies to more than 43 million Americans who owe a combined $1.6 trillion in student debt held by the federal government, according to the latest data from the Education Department.