The 6th Circuit Court of Appeals has upheld the dismissal of a legal challenge to a crucial Biden administration student loan forgiveness initiative, preserving over $51 billion in debt relief and allowing for more after the administration extended a key deadline for the program. The decision was met with praise from groups like the Student Borrower Protection Center, who called it a win against right-wing attacks on student debt relief.
The legal challenge focused on the IDR Account Adjustment, a program announced by President Biden in 2022 to address longstanding issues with income-driven repayment plans and Public Service Loan Forgiveness. This initiative credits borrowers with time towards loan forgiveness for periods that may not have counted under previous plans. Borrowers can qualify for forgiveness under IDR plans after 20 or 25 years, or in as little as 10 years for those in nonprofit or government jobs pursuing PSLF.
After the Biden administration began implementing loan forgiveness under the program, a group of conservative groups filed a lawsuit claiming it was unconstitutional. However, the federal district court in Michigan dismissed the case for lack of standing, which was upheld by the Sixth Circuit Court of Appeals. The court ruled that the challengers did not have a sufficient link demonstrating harm from the IDR Account Adjustment.
Following the ruling, the challengers expressed their disagreement with the decision, indicating that they may consider appealing to the U.S. Supreme Court. Meanwhile, the Biden administration has approved over $51 billion in loan forgiveness for more than a million borrowers under the IDR Account Adjustment, with additional relief expected to come. The administration recently extended the deadline for borrowers to consolidate their loans through the federal Direct consolidation program to qualify for relief under the account adjustment.
In addition to the IDR Account Adjustment, the Biden administration is finalizing a new student loan forgiveness plan that will target relief to five groups of borrowers who have experienced interest accrual, capitalization, and significant hardships. This plan is expected to benefit up to 25 million borrowers, with the Education Department set to publish final regulations governing the program in the coming months. Implementation is anticipated to occur in the fall, though challenges may arise in court.
Despite potential legal challenges, the Biden administration remains committed to providing student debt relief to millions of borrowers across the country. Secretary of Education Miguel Cardona emphasized the administration’s efforts to bring relief to those struggling with student loan debt and noted that the Education Department is working diligently to roll out forgiveness under the various initiatives to alleviate the burden on borrowers.
