Student Loan Forgiveness Update: Trump DOJ Makes Supreme Court Move

President Donald Trump‘s new Justice Department on Friday requested the U.S. Supreme Court freeze a case involving student debt.

Why It Matters

During former President Joe Biden‘s administration, more than 5 million Americans saw their student debt forgiven via new policies and payment plans available via the Education Department.

However, as Trump begins his second term, many of those policies face uncertainty, and borrowers could deal with less lenient loan rules.

What To Know

The case that the Department of Justice (DOJ) asked to freeze would see a hearing during the Supreme Court’s March or April session. If the Supreme Court agrees, the case would essentially be put on hold for an undetermined period of time.

The case in question involves the Supreme Court hearing the government appeal for a decision that blocked Biden’s rule allowing students to have their debt forgiven if they were found to be defrauded by a college or university.

Trump’s DOJ also asked for three other cases involving environmental regulations to be put on hold as well.

In the final days of his presidency, Biden approved an additional round of $600 million in student loan forgiveness for 8,000 borrowers.

That applied to those who are entitled through the income-based repayment plan and former students at DeVry University.

In 2022, DeVry University was found to have “made widespread substantial misrepresentations about its job placement rates,” according to the U.S. Department of Education.

Altogether Biden’s Department of Education passed $188.8 billion in student loan forgiveness for 5.3 million borrowers.

What People Are Saying

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “We don’t yet know if the DOJ’s push to freeze these current cases will ultimately be a bad one for students. The particular issue at the heart of one of these cases involved students who were allegedly defrauded by their university with unnecessary loans and easing the pathway to forgiveness on that debt.”

Beene continued, “It’s widely perceived the new administration is going to take a negative stance on student loan forgiveness, which is probably true, but in the case of loans that were found to be fraudulent, there may be some mercy given. The freeze on these cases isn’t to scrap student debt forgiveness altogether, but rather to take a ‘wait-and-see’ approach to how the new administration wants to reshape the programs put in place from the one that preceded them.”

What Happens Next

While Biden is leaving behind a legacy of student loan forgiveness, borrowers are unlikely to see as much financial relief under Trump’s presidency.

“The future for student borrowers doesn’t look as promising,” Beene said. The Trump administration “is more than likely to scale back these efforts, though it remains to be seen to what extent.”