DAVIDSON, N.C. — The Student Loan Debt Relief Plan is currently in limbo, leaving many to wonder if any of their student loans will be canceled at all.

In August, the Biden administration announced its plans to cancel thousands in student loan debt for millions of eligible persons.

The program authorized the U.S. Department of Education to provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education, and nearly $10,000 in debt cancellation to non-Pell Grant recipients. 

Around 26 million people applied before court orders blocked the relief from being enforced. 

Some legal experts predict the loan forgiveness program will be overturned. However, an education expert says he’s not sold on that outcome.

Christopher Marsicano is an assistant professor of educational studies and public policy at Davidson College.

He says the Biden administration is leaning on the Higher Education Relief Opportunities for Students Act of 2003, also known as the HEROES Act, as a precedent for enforcing the loan forgiveness plan. 

The HEROES Act, signed by then-President George W. Bush, was enacted following the Sept. 11 attacks. It outlines the U.S. secretary of education’s authority to reduce or eliminate the obligation to repay the principal balance of federal student loan debt, during certain events like a war or national emergencies.

In a memorandum, the Department of Education general counsel indicates the COVID-19 pandemic as being a national emergency. 

“Well, not everybody agrees with that interpretation of the law,” Marsicano said. “A law designed for a time of war versus a public health crisis, there’s some debate as to what Congress really meant or wanted in 2003.”

Around 16 million people were approved for the forgiveness plan, before the Education Department stopped processing applications, after a federal judge in Texas blocked it. The judge citied the HEROES Act for the decision, stating it doesn’t give the executive branch authorization for this loan forgiveness program. 

The plan is also being halted by a federal appeals court in St. Louis, in response to a lawsuit brought against the relief plan by six states.

The Supreme Court will begin hearing arguments for both cases in February. 

Marsicano says many legal experts feel the federal loan forgiveness program is likely not going to be enacted.

“[They say that] due to the 6-3 conservative to ;iberal justice makeup of the Supreme Court, the federal loan forgiveness program is likely [not happening],” Marsicano said.

“I am not convinced that is the case. These Supreme Court [members] have made strong arguments for executive power in the past. There is a clear legal reasoning from the HEROES Act of 2003, what could seem like a 6-3 decision in one way could easily be a 4-5 decision the other way… This is not out of the blue. There is some legal standing to do this. It’s pretty much a waiting game to see what happens.”

The student loan payment pause has been extended, as borrowers wait to see how this issue is resolved. 

Debt Payoff Queen, helping others reach financial freedom

A Mooresville woman who racked up thousands in student loan debt is teaching millennials how to reach financial freedom.  

Jeanette Rosalia is employed full time as a project manager for a company in Cornelius. When her day job ends, that’s when the entrepreneurial work begins. 

Rosalia is the boss of her own business. She’s a money coach, teaching millennials how to get out of debt, all while paying off her loans as well. 

“Some days my brain feels like a bowl of mashed potatoes,” Rosalia said. “But we get through it, helping other people along the way.”

Like millions across the country, Rosalia racked up thousands in student loan debt. Rosalia went to college for six years total and received her master’s in business administration. 

“I consolidated all my loans together after I graduated with my MBA, just so I could put everything on one bill and lock in a fixed interest rate. Once I did that, my total due to the Department of Education was over $110,000. Since then, it took me almost five years of paying the minimum and doing absolutely nothing to better this.”

Rosalia says the student loan payment pause helped her pay back a sizeable chunk of her debt and get below the six-figure marker.

“Made me the debt payoff queen, and from there in 2020, I started my business, and I haven’t looked back,” she said. 

Now, Rosalia is sharing what worked for her with others, so they can do the same.

She meets with millennials, most of them virtually, reviewing their financial situation, while setting short- and long-term goals to help them chop away at their debts and loans.

“Transform your money situation from not — to hot,” she said. “Living the life [you] want to live.”

Rosalia says she’s excited to be a money coach, so she can help others get out from under the weight of their student loans.

“I was saying no to things I wanted to say yes to because of money. I like giving the person on the other side of the screen some sort of stability and-or joy, knowing I’ve either helped you, or given you clarity, makes me feel good,” Rosalia said.

Rosalia says she’s expecting to receive around $18,000 in loan forgiveness — if the debt relief program is implemented.