Millions of student borrowers are wondering why canceling their student debt was deemed illegal after the cancellation of PPP loans?

For some, the answer is congressional approval.

Paycheck Protection Program

The Paycheck Protection Program (PPP) was established by the CARES ACT, which was passed by Congress and signed into law by former President Trump in the spring of 2020 to help combat the economic effects of COVID-19 lockdowns. 19 on business.

According to the Treasury Department, the program provided small business owners with funding to pay up to 8 weeks of salary, including benefits. Beneficiaries could also use the funds to pay rent, mortgage interest and utilities, in addition to other living expenses.

While PPP funds were technically considered a loan, Congress has authorized up to 100% loan forgiveness for recipients who meet certain eligibility requirements.

Many small business owners have had their PPP loans forgiven.

For example, Myra Brown, one of two plaintiffs in a lawsuit that recently blocked President Biden’s student loan forgiveness program, had nearly $50,000 in PPP loans canceled earlier in 2022.

Additionally, the Job Creators Network, the conservative learning organization that brought the lawsuit against the student loan forgiveness, has had more than $135,000 in PPP loans forgiven.

Student Loan Forgiveness

Unlike PPP loans, the power to forgive student loan debt is not as clear, some say.

For example, a month after President Biden announced his landmark student loan forgiveness program, Forbes published an article detailing how the plan would likely face a rocky road with numerous legal challenges.

According to the article, the Biden administration believes it has the authority to forgive student loan debt under the HEROES (Higher Education Relief Opportunities for Students) Act, which was passed in 2003.

In fact, the Trump and Biden administrations relied on language in the HEROES Act to suspend student loan payments and accrued interest on loans during the COVID-19 pandemic.

But not everyone is convinced that the president or the secretary of education has the legal power to cancel student debt.

And it didn’t take long for the lawsuits against Biden’s debt cancellation plan to start turning into legal headaches for the administration and millions of student borrowers.

In its lawsuit against the program, the Job Creators Network called the debt relief plan an “unprecedented executive power grab.”

On November 10, a U.S. District Judge in Texas ruled in favor of the Job Creators Network and blocked the implementation of Biden’s student loan forgiveness program. A few days later, the Ministry of Education removed the request for debt relief from its website.

On Nov. 18, the Biden administration asked the Supreme Court to determine whether it had the legal authority to write off student loan debt.

At present, no decision has yet been made by the High Court.