Federal Judge Strikes Down Biden's Student Loan Relief Program

A district court judge recently ruled that the Biden administration exceeded its constitutional authority in implementing a wide-reaching student loan forgiveness program. The Biden administration had argued that its authority to forgive student loans was proper under the Higher Education Relief Opportunities for Students Act of 2003 (the HEROS Act). The ruling is in response to a lawsuit filed by a conservative advocacy group, the Job Creators Network Foundation, on behalf of two student borrowers: one who was ineligible for the relief and one who was eligible for only partial relief. A federal appeals court had blocked the program in October, but did not officially strike down the program while the appeals played out. While the Department of Education has now stopped accepting applications for the loan forgiveness program, it has indicated that it is working to overturn the ruling. Several states who had opposed the plan have already indicated that they plan to appeal to the U.S. Supreme Court if they do not receive a favorable outcome in lower court. For more information on the tax treatment of student loan debt, visit Tax Facts Online. : Q 8048.