The Biden administration released detailed new data this week breaking down who has been approved for student loan forgiveness under the President’s one-time debt relief plan. However, the relief remains on hold while the Supreme Court considers legal challenges.
Here’s the latest.
Biden’s Student Loan Forgiveness Plan in Limbo
Biden’s one-time student loan debt relief plan would provide $10,000 in student loan forgiveness for many borrowers with government-held federal loans. The amount of debt relief can double (to $20,000) for borrowers who received Pell Grants when they went to school. To qualify, single and married-filing-separately borrowers must have earned under $125,000 in Adjusted Gross Income in either 2020 or 2021; that income cap doubles for borrowers who are married and filed their taxes jointly.
Millions of borrowers applied for relief once the application portal went live last fall. But subsequently, multiple legal challenges complicated the initiative. Two federal courts blocked implementation of the debt relief as the Education Department was processing student loan forgiveness applications. The Biden administration appealed to the Supreme Court, which agreed to consider the two challenges.
New Data on Biden’s Student Loan Forgiveness Approvals
According to Education Department data released on Friday, 26,260,000 borrowers applied for student loan forgiveness or were determined to automatically qualify before the program was blocked by the courts. Of these, the department had already approved 16,486,000 for discharge. Some other key data points:
- The Education Department broke down the applications by state. Unsurprisingly, the state-by-state breakdown mirrors population, with California1 (1,473,000), Texas (1,391,000), Florida (1,047,000), and New York (998,000) having some of the highest approval figures.
- Even Republican-leaning states saw significant approval figures, with Ohio (702,000), Indiana (348,000), South Carolina (282,000), and Louisiana (242,000) leading (in addition to Texas and Florida).
- The Education Department received nearly 60,000 applications from borrowers who live in U.S. territories or reside abroad, with over 30,000 approved.
- “Nearly 90%” of the student loan forgiveness relief would go to borrowers earning less than $75,000 per year, according to a White House fact sheet.
Supreme Court to Decide Fate of Biden’s Student Loan Forgiveness Initiative
“Millions of those borrowers could be experiencing the benefits of that relief today – were it not for lawsuits brought on by elected officials in some of their own states,” said the White House in a statement on Friday, referring to one of two legal challenges brought by a coalition of Republican-leaning states. The states argue that Biden’s plan would deprive them of revenue by encouraging borrowers with commercially-held FFELP loans, which are administered by quasi-state entities, to consolidate into the government’s Direct loan program. The Biden administration disputes this as speculative. The Education Department approved 305,000 student loan forgiveness applications in Missouri, one of the leading states that filed suit challenging the program, according to the new data.
The Supreme Court is set to hear oral arguments on the two legal challenges next month, and a decision should be issued by June of this year. But the Biden administration may not have a backup plan if the court strikes down the program.
We are “not deliberating or considering any other approach,” said Bharat Ramamurti, the deputy director of the National Economic Council, during a press briefing on Thursday, according to Yahoo News. “Our lawyers and team are confident in the legal authority” underpinning the initiative.
Borrower advocates have suggested a number of alternatives if the student loan forgiveness program is struck down, including reissuing the program under a different legal authority, extending the ongoing student loan payment pause again, or further revamping income-driven repayment plans to accelerate student loan forgiveness.
Further Student Loan Forgiveness Reading
Lawsuit Challenging Biden’s Student Loan Forgiveness Plan Gets Dismissed, But Legal Battle Continues
Will You Be Taxed On Student Loan Forgiveness In 2023? Key Details
Student Loan Forgiveness: These Deferment And Forbearance Periods May Count
Your Student Loan Forgiveness Is Getting Delayed, And It May Get Worse
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