Biden makes bold prediction on student loan forgiveness
President Biden believes that despite ongoing legal challenges, borrowers will begin receiving student loan forgiveness under his unique two-week cancellation initiative.
Here’s what borrowers need to know.
Federal Court temporarily blocked student loan forgiveness
Under Biden’s one-time student loan forgiveness plan, up to 40 million borrowers with government-held federal funds student loans will be eligible for up to $20,000 in student loan forgiveness. Single and married borrowers filing separately must have earned less than $125,000 in 2020 or 2021, or $250,000 if married and filing jointly. Borrowers who have never received a Pell grant can receive $10,000 in student loan forgiveness.
But a series of legal challenges threatened the initiative. Several lawsuits filed by Republican heads of state and conservative legal organizations have been fired in recent weeks. But a coalition of Republican-led states appealed a rejection to the 8th Circuit Court of Appeals, which temporarily halted the student loan forgiveness program last Friday while considering the legal arguments. The court could rule at any time on whether to allow the administration to proceed with the initiative.
“We’re going to win this case,” Biden predicted in public remarks thursday. “I think in the next two weeks you’re going to see those checks coming out.” Notably, borrowers will not actually receive student loan forgiveness checks, as any loan forgiveness would be applied directly to their loan balance.
Application for student loan forgiveness remains open
Although the Biden administration was unable to implement student loan forgiveness while the 8th Circuit temporary stay remains in effect, the Education Department is still able to accept applications.
“We encourage you to apply if you are eligible,” the education department says in a post on the application website. “We will deal with the dumps quickly when we are able to do so.” More than 20 million borrowers have already submitted applications for student loan forgiveness, according to Education Department officials.
The 8th Circuit’s administrative stay is “temporary” and “does not stop the Biden administration’s efforts to provide borrowers with the opportunity to seek debt relief,” Education Secretary Miguel Cardona said in a statement. a statement. Tweeter Last week. “We are moving full speed ahead to be ready to provide relief to borrowers who need help.”
Other Student Loan Forgiveness Programs Remain Available
While Biden projected optimism that federal courts would allow the one-time forgiveness program, other significant federal student loan forgiveness initiatives remain unaffected by the ongoing litigation.
The PSLF Limited Waiver, which provides considerable flexibilities to borrowers seeking relief through the Civil Service Loan Forgiveness Scheme, expires October 31. But borrowers can still take steps to apply at the deadline.
Meanwhile, the Ministry of Education recently announced that it would be launch of IDR account adjustmentanother sweeping initiative that could bring millions of federal student loan borrowers — including those seeking PSLF — closer to loan forgiveness by this summer.