President Joe Biden announced over the summer a three-part plan that aimed to address the ongoing federal student debt crisis, including a one-time federal loan forgiveness.

The administration announced that up to $20,000 in federal student debt relief would be provided for those who received Pell Grants and up to $10,000 to those who didn’t. This would apply to borrowers with an individual income of less than $125,000 and married couples with incomes of $250,000 or less. The status of dependent students would be determined by their parents’ income. 

A final pause on federal loan payments has been instated through the end of the year to avoid unnecessary defaults. But on Nov. 10, a federal judge from the Northern District of Texas struck down the loan forgiveness plan, calling it unconstitutional. This decision came on the heels of another lawsuit from the Job Creators Network Foundation – a conservative non-profit who filed it on behalf of two loan borrowers. 

The judge, Mark T. Pittman, wrote in his ruling that the program was “a complete usurpation” of congressional authority. Pittman continued that, “in this country, we are not ruled by an all-powerful executive with a pen and a phone … instead, we are ruled by a Constitution that provides for three distinct and independent branches of government.”

The White House has already confirmed that it will be appealing this decision, which will be sent to the Fifth Circuit Court of Appeals. If it’s upheld, the decision will be sent to the U.S. Supreme Court. As a result of this ruling, the Department of Education is no longer accepting loan forgiveness applications, leaving what comes next for the Biden administration’s plan uncertain. 

If the order succeeds, Jennifer Burns, assistant vice president of financial aid at Chatham University, shared how this could potentially impact students, based on the National Center for Education Statistics Integrated Postsecondary Data System. 

According to this system, in 2020-21 about 60% of all Chatham undergraduates received some form of federal student loans, for an average of $6,175 in aid received, while 27% of all undergrads were Pell grant recipients. The average price of attending Chatham University in 2021 was $27,225. For those whose income was less than $110,000, this average came out to $22.728.25.

This average cost, combined with the average amount of federal aid received by students, could mean that about 27% of an annual tuition cost could potentially be expunged.

For updates on the process, visit studentaid.gov.