President Biden announced significant progress in processing millions of student loan forgiveness requests submitted by borrowers seeking relief under his unique forgiveness program.
But Biden accused Republican state leaders of filing legal challenges that temporarily crippled the student loan forgiveness initiative.
Biden’s student loan forgiveness plan stalled by legal challenges
Under the Biden administration’s plan, up to 40 million borrowers can receive $10,000 or up to $20,000 in student loan forgiveness whether their income was within certain limits in either of the last two years. Only federal student loans held by the government are eligible for relief.
But several individuals, conservative learning legal organizations and Republican state leaders have filed multiple legal challenges seeking to block the plan. Several trials of this type have already been fired by federal judges, as no plaintiff has thus far been able to demonstrate a sufficiently concrete harm that would give them legal standing to bring a lawsuit.
But last month, a coalition of Republican-led state attorneys general appealed the dismissal of their suit to the 8th Circuit Court of Appeals. The coalition of states is asking the appeals court to issue a preliminary injunction to stay implementation of the student loan forgiveness program while legal battles continue. In the meantime, the court issued an administrative suspension, which temporarily blocked the student loan forgiveness program for almost two weeks. This temporary stay remains in effect while the court considers legal arguments regarding a preliminary injunction.
Biden accuses Republicans of blocking student loan forgiveness near midterm
In a series of tweets On Thursday, President Biden blamed Republicans for blocking student loan forgiveness for millions of borrowers.
“Last month I launched the app for our administration’s student debt relief,” Biden said. “Nearly 26 million Americans have already given us the information to consider for this life-changing relief. And as of this week, [the Education Department] will have approved 16 million applications… But that relief is pending — as elected Republicans are doing everything they can to deny it, even to their own constituents.
The Republican coalition’s main argument in their 8th Circuit case is that Biden’s student loan forgiveness initiative hurts states financially because state-affiliated FFELP agencies — the agencies that help run a former federal student loan program which involves commercial lenders – will be deprived of income as a result of debt cancellation.
But the Biden administration countered that argument, noting that FFELP loans held by companies are not eligible for the initiative as of September 29, before an application for student loan forgiveness is available (let alone approved). Justice Department lawyers also pointed out that MOHELA, one of the main FFELP agencies cited by Republican state challengers, is an independent agency that can sue and be sued in its own name, and yet does not seem be directly involved in the litigation.
MOHELA seemed to confirm this in a correspondence to Rep. Cori Bush (D-MO) earlier this week. The agency said its management was “not involved in the Missouri Attorney General’s Office’s decision to file a preliminary injunction petition in federal court on September 29, 2022” and that MOHELA “does not exist for make a profit”. Justice Department attorneys quickly forwarded the letter to the 8th Circuit.
Biden has vowed to defeat Republican-led challenges.
“We are fighting these attacks by elected Republicans in court,” he tweeted. “I will never apologize for helping working-class and middle-class Americans recover from the pandemic.”
Borrowers can still submit a request for student loan forgiveness
Although this student loan forgiveness program is suspended as the 8th Circuit’s temporary order remains in effect, Biden’s comments confirm that the Department of Education can still receive and process student loan forgiveness applications. His comments also suggest that the administration is able to process forms quickly, given that there have been 16 million approvals in a few weeks since the the app went live first.
“We will continue to consider applications” even if the temporary stay of the 8th Circuit remains in effect, indicates a message on the application site.