October 20, 2022

The Battle for Biden Student Loan Forgiveness continues. Here’s What You Need to Know.


Biden Forgiveness is Still Moving Forward

Despite at least 5 major conservative lawsuits in recent weeks, Biden’s administration continues to move forward going live with the application this week and announcing that processing will begin on October 23, 2022.

If your hair sticks up when following lawsuits, you’re not alone. The most notable case, Nebraska v. Biden, consisting of six states, gained some traction on September 29, 2022. A motion for a temporary restraining order was made, followed by an injunction to permanently block the relief. A final decision has yet to be made. 

The Lawsuits Have Already Spurred Changes to Eligibility

Though most of these lawsuits are still undecided, the administration has already reacted to some of them, slightly changing eligibility for student loan forgiveness. 

Since the suits, the administration has pulled back, removing privately held student loans, including:

  • FFEL loans
  • Perkins loans

These loans are not eligible for forgiveness unless the borrower consolidated them into a Direct Loan before September 29, 2022.

This small change in eligibility could impact over 700,000 borrowers. While this action cuts off eligibility for some federal student loan borrowers, it’s likely a strategic move from the administration to protect the majority of borrowers from the lawsuits. 

Download The Chipper Guide to Biden Forgiveness to learn more about Biden Relief.

Speed Matters, Don’t Delay Your Application

The landscape of eligibility for student loan forgiveness is rapidly changing. With the application live, borrowers are swarming to studentaid.gov and the Chipper app to apply for forgiveness. 

Borrowers who apply for forgiveness before the lawsuits are resolved may have a better chance of forgiveness. No one knows how the courts will rule, but as long as the program is not formally halted, borrowers have an opportunity to take advantage of up to $20,000 in forgiveness.

Inside the Looming Lawsuits  

Six states

The states of Arkansas, Iowa, Kansas, Nebraska, Missouri, and South Carolina have filed suit against the Biden administration to block forgiveness. One of the central claims of the case is authority. 

The states say the president doesn’t technically have the power to make these far-reaching policies. Forgiving this much student debt could negatively impact state revenues, which is one of the reasons behind the suit. It’s worth noting that with this scale of forgiveness, state student loan servicers are likely to lose out revenue they’d collect from borrowers.  

Additionally, the states argued that the policy would hurt the revenues of student loan servicer MOHELA.

The Pacific Legal Foundation, a nonprofit legal organization

Conservative nonprofit the Pacific Legal Foundation filed suit against the administration on behalf of a federal student loan borrower. The borrower is eligible for Public Service Loan Forgiveness (PSLF). The lawsuit claims wiping out through Biden’s initiative will lead to an unwanted tax bill.

The administration clarified that borrowers must apply for forgiveness, which will not automatically be granted. That means the borrower can avoid this tax bill by sticking with PSLF. 

The judge in this case has denied the plaintiff a temporary restraining order and the temporary injunction to block the policy. At present, the judge is debating a denying a permanent injunction to block the policy, which could be seen a win for the administration and the fate of the policy.

Arizona’s attorney general

Arizona Attorney General Mark Brnovich filed a suit against the administration in reaction to the announcement, claiming that the forgiveness could discourage young lawyers that would otherwise qualify for PSLF from applying to state jobs. The suit claims the policy will negatively impact state employment, making it harder to recruit lawyers for government roles. 

Wisconsin Institute for Law and Liberty, a law firm

The conservative law firm, the Wisconsin Institute of Law and Liberty, filed suit on behalf of the Brown County Taxpayers Association. The lawsuit claims that the forgiveness policy is an overextension of authority and has “improper racial motives” as it disproportionately helps borrowers of color. 

Ensure You are Prepared to Tackle Student Debt  

Don’t wait. You can apply for Biden forgiveness through the Chipper app now, and ease the burden of the changing landscape.

Beyond submitting your application, Chipper will keep you informed of changes, help you ensure that you are on the right repayment plan, and provide additional solutions for tackling student loan debt when payments resume in January.

Use Chipper for Lower Payments

Chipper can help you find a student loan repayment plan that actually fits into your budget. You simply fill out your information and link your student loan account for us to generate your options in seconds. We help the average student loan borrower save over $300 a month off their student loan monthly payment. Lowering your monthly payment plan can game changing for your personal finance and can be done in minutes! Sign up for Chipper today to get on track with your student loans.

Use Chipper for The Best Path to Forgiveness

Finding your path to student loan forgiveness is easier than ever before. Chipper helps members find better Income-Driven Repayment (IDR) plans every day. Once enrolled in an eligible repayment plan, we can help you explore your forgiveness options and understand your path towards forgiveness. Sign up with Chipper today and get on track with your student loans.

Use Chipper for Round-Ups

Paying off your student loans doesn’t have to be a long and painful journey. Round-Ups are a way to directly pay off your loans with your everyday spending! By tracking your linked spending account(s), we will calculate the rounded up amount from each transaction in a week (IE spending $4.28 would add $0.72 to the weekly amount). We then initiate a payment towards your student loan for the weekly amount. Get chipping away on your student loans with Chipper today.

Use Chipper for Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness (PSLF) program was created to provide relief to borrowers aiding the public sector. Unfortunately, 30% of applicants are denied due to incorrect paperwork. We can help! Chipper was created to solve this issue by assisting borrowers in understanding their options as well as allowing forgiveness eligible users enroll into the best forgiveness program available. Sign up for Chipper today to see your student loan forgiveness options and get the forgiveness you deserve.

Use Chipper for Teacher Loan Forgiveness (TLF)

The Teacher Loan Forgiveness (TLF) program was created to enable teachers working in Title 1 schools to receive student loan forgiveness of up to $17,500 (depending on their teaching subject). Chipper has helped teachers from all over the country qualify for TLF program and can help you get the forgiveness you deserve today. Find out if you qualify for forgiveness in minutes with our employer search tool.

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