Student loans

What’s going on with Biden’s student loan debt forgiveness program? | New

In August, the Biden administration announced its student debt cancellation program. The program provides full or partial loan discharge up to $20,000 for Federal Pell Grant recipients and $10,000 for non-Pell Grant recipients. Eligible individuals include individuals who earned less than $125,000 and families who earned less than $250,000 in 2020 or 2021. As of October 17, 2022, the student debt relief application was live, with its closing date set at the end of the 2023 calendar. year.

“We are providing relief to millions of borrowers who need it most,” President Joe Biden said. “Under my student debt relief plan, almost 90% of the benefits will go to people earning less than $75,000 a year.”

In the first week of the app going live, nearly 22 million people signed up, more than half of qualified borrowers.

As of October 21, 2022, Biden’s student loan debt forgiveness plan has been temporarily stalled, preventing the debt from being erased. This block of student debt was issued by the United States Court of Appeals for the Eighth Circuit, which is considering a petition from six Republican-led states (Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) challenging the program. These states argued that the student debt forgiveness program would hurt state-based loan companies. It was later thrown out by a federal judge, but later went to federal appeals court.

“The order does not reverse the trial court’s dismissal of the case or suggest that the case has merit,” White House press secretary Karine Jean-Pierre said. “It simply prevents the debt from being discharged until the court makes a decision.”

On November 10, a federal judge declared the program illegal. The relief disbursement has been halted as the program relies on the 5th Circuit Court of Appeals to reinstate it.

“We are moving full speed ahead to be ready to provide relief to borrowers,” Education Secretary Miguel Cardona said. “Today’s temporary decision does not stop the Biden administration’s efforts to provide borrowers with the opportunity to apply for debt relief, nor does it prevent us from reviewing the millions of applications we have received. .”

Student loan forgiveness is still pending, but the Supreme Court has repeatedly refused to block Biden’s student loan relief plan. So, for those who qualify, keep checking for updates on student loan debt forgiveness at StudentAid.gov/DebtRelief.

Contact journalist Allison Schaal at [email protected]. Twitter: @allison_schaal

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