Some 16 million applications for student debt relief will be approved by this week, provided the White House plan survives court challenges, President Biden said Thursday.
Almost 26 million people have applied for up to $20,000 in debt forgiveness since the White House launched the student loan forgiveness application on Oct. 17, Biden said in a series of tweets. Of those applications, a total of 16 million will have been pre-approved by the end of this week.
"That's 16 million Americans, so far, who should be seeing student debt relief in the coming days," Biden said. "But that relief is on hold — because Republican elected officials are doing everything they can to deny it, even to their own constituents.
Biden plans to speak on debt relief on Thursday at Central New Mexico Community College in Albuquerque. Biden is highlighting the issue, popular with the younger voters Democrats need to motivate, just days ahead of key midterm elections that will determine control of both houses of Congress and the fate of Biden's legislative agenda.
The plan, which was announced in August, is currently being challenged by a number of lawsuits. A federal judge last month temporarily blocked the Department of Education from paying out debt forgiveness until the 8th U.S. Circuit Court of Appeals in St. Louis rules on a lawsuit brought by six Republican-led states. Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina sued on the basis that the debt relief would cause loan servicers that operate in the state to lose revenue. A judge in the United States District Court in Missouri had previously dismissed the case.
Lawyers who have filed a different lawsuit on Tuesday asked the Supreme Court to halt the plan; they are advocating on behalf of two plaintiffs in Indiana who say they would be irreparably harmed if they have to pay state taxes on forgiven loans. The Department of Education has already opted out the plaintiffs, and said that anyone who doesn't want student debt forgiveness can opt out or choose not to apply.
A guide on the Department of Education's website notes that debt discharge is on hold due to a court order, but those with federal student loans are still encouraged to apply. Debtors who made $125,000 or less in 2020 or 2021 — or if they and their spouse made less than $250,000 in those years — can apply for up to $10,000 in federal student loan debt. Borrowers who received a Pell Grant while they were in college are eligible for up to $20,000 in forgiveness.
The application is set to be open through December 2023. Borrowers are making a rush to get applications in before student debt payments resume in January after a freeze for nearly three years. The Trump administration issued a moratorium on loan payments, as well as a temporary interest rate of 0%, as a result of early Covid-era economic instability.
— With assistance from Mackenzie Hawkins.
