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U.S. Supreme Court Student Debt Rulings Leave Public Service Loan Forgiveness Unchanged

July 06, 2023 9:24 AM | Anonymous

The U.S. Supreme Court issued an opinion in the Biden v. Nebraska case holding that a pandemic-era law that gave the U.S. Department of Education (DOE) flexibility to “waive or modify” student loan provisions during a national emergency doesn’t give DOE the authority to cancel student debt. As a result, the Biden Administration cannot move forward with its plan to cancel up to $10,000 of student debt per borrower and up to $20,000 in student debt per borrower with a Pell Grant. Many nonprofit employees, and many people who receive services from nonprofits, would have benefitted from this debt cancellation proposal. In light of the Court’s decision, the Biden Administration has indicated that it will try other regulatory or administrative approaches to reduce student debt. While some nonprofit employees will be disappointed by the Court’s decision, they should note that the ruling has no impact on the Public Student Loan Forgiveness (PSLF) program, which provides for student loan forgiveness (separate from the Biden Administration’s debt cancellation proposal) for borrowers who work for charitable nonprofits for 10 years while paying off their student loans. Unlike the $10,000 debt cancellation proposal, a federal statute expressly authorizes the loan forgiveness in PSLF. The National Council of Nonprofits posted an analysis of the implications of the student debt court decision (and a second related case that the Court decided last Friday) for nonprofit employees.

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