White House announced On January 30, 2023, we announced that the Covid-19 National Emergency Declaration will end on May 11, 2023.
The announcement has several potential implications for student loans, including a suspension of existing student loan payments and a potential impact on Biden’s student loan forgiveness plan.
The potential end of this Covid-19 emergency could have side effects that affect student loan borrowers. Here’s what you should know:
suspending student loan payments
As of March 13, 2020, federal student loan repayment obligations have been suspended. Interest on loans subject to suspension of payments is waived. Section 3513 CARES Act (PL 116-136) provides a suspension of payments and interest waivers until September 30, 2020.
Since then, the Trump and Biden administrations have Hero Act 2003 (PL 108-76) Further extend suspension of payments and interest forgiveness.
Biden’s Student Loan Forgiveness Plan
On Aug. 24, 2022, President Biden will offer up to $20,000 in student loan forgiveness to borrowers who previously received federal Pell Grants and up to $10,000 in student loan forgiveness to students who have not. announced the plan. Eligible borrowers must earn less than her $125,000 if single and him less than $250,000 if married.
Six lawsuits challenged and tried to block the president’s plan. Several lawsuits were dismissed for lack of legal standing, but two were not. The Biden administration appealed These cases (Biden v. Nebraska and Department of Education v. Brown) will be filed in the U.S. Supreme Court with hearings scheduled for February 28, 2023.
On November 22, 2022, the U.S. Department of Education will announced Payments will resume and the suspension of payments and interest waiver will end 60 days after the case is resolved.
End of state of emergency declaration
The end of the national emergency declaration on May 11, 2023 could interfere with both the suspension of payments and interest forgiveness, as well as the president’s student loan forgiveness plan.
The legal power to suspend payments and forgive interest is based on the Heroes Act 2003.Biden administration claimed The Heroes Act of 2003 also gives legal authority to implement the president’s student loan forgiveness plan.
However, a waiver under the Heroes Act of 2003 states:In connection with war or other military operations or national emergencies.” [20 USC 1098bb(a)(1)] The Heroes Act of 2003 defines the term “national emergency” as a national emergency declared by the President. [20 USC 1098ee(4)]
therefore, Once the national state of emergency ends, the statutory power to suspend payments and provide interest waivers endsSimilarly, if the Biden administration wins the U.S. Supreme Court case, the president’s legal authority to implement the student loan forgiveness plan will end when the national emergency declaration ends.
Supreme Court precedent
The U.S. Supreme Court may rule shortly after its February 28, 2023 hearing. However, the U.S. Supreme Court can wait until the end of its term before making a decision. His term on the U.S. Supreme Court ends on the Sunday before the first Monday in October, but the court will go on recess from late June or early July. Therefore, he may wait until the end of June for the U.S. Supreme Court to rule on the case.
It seems strange that President Biden will end the national emergency declaration on May 11, 2023, but he still relies on the national emergency declaration to suspend payments and cancel interest, as well as the president’s student loans. You may need to implement a waiver plan.
But it is possible that the Biden administration is interpreting the 2003 Heroes Act.”in relation to”, because the national emergency declaration does not need to be still in effect.
If the Biden administration loses the U.S. Supreme Court case, the Biden administration could adopt Plan B, which would extend the suspension of payments and interest forgiveness indefinitely once the national emergency declaration ends on May 11, 2023. lose.
However, a White House administration policy statement said, “Currently, the administration’s plan is to extend the state of emergency until May 11, ending both emergencies on that date.” As with other “final” announcements related to student loans, the government’s plans to end the state of emergency on May 11, 2023 are subject to change.