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Tax Blog

Student Debt Cancellation, again…

Another week, more news about student debt cancellation. Last week a federal judge in Texas determined that the relief plan from President Biden was unlawful. U.S. District Judge Mark Pittman, in a 26-page ruling, said the HEROES Act that was relied on for the relief plan did not authorize the nearly $400 billion student loan program.

“The Program is thus an unconstitutional exercise of Congress’s legislative power and must be vacated.” Mark Pittman wrote in his ruling.

Further, on Monday, the 8th Circuit Court of Appeals, said that a temporary stay will remain indefinitely.

So, what happens now?

The Justice Department is set to appeal the decision of the 8th Circuit Court of Appeals and has already appealed the decision by Mark Pittman. The Department of Education, in response to the Court decisions, has quit accepting new applications for Student Debt relief. Meanwhile, the approximately 26 million people who have already completed the application are in limbo until these cases are fully decided. When that may be is anyone’s guess as Supreme Court Justice Amy Coney Barret has already denied multiple emergency requests to block relief. It does seem likely that one or both of these cases will end up being heard by the Supreme Court at some point as various Courts around the United States have issued differing holdings.

For more information, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc., at (618) 997-3436.


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