President Biden announced significant progress in processing millions of student loan forgiveness applications submitted by borrowers who are seeking relief under his signature one-time cancellation program.
But Biden blamed Republican state leaders for filing legal challenges that have temporarily paralyzed the student loan forgiveness initiative.
Biden’s Student Loan Forgiveness Plan Held Up By Court 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 if their income was within certain limits in either of the last two years. Only government-held federal student loans are eligible for the relief.
But several individuals, conservative-learning legal organizations, and Republican state leaders have filed multiple legal challenges seeking to block the plan. Several such lawsuits have already been dismissed by federal judges, as no Plaintiffs so far have been able to demonstrate a sufficiently concrete injury that would give them legal standing to sustain a lawsuit.
But last month, a coalition of Republican-led state attorneys general appealed a dismissal of their suit to the 8th Circuit Court of Appeals. The coalition of states are asking the appeals court to issue a preliminary injunction to halt implementation of the student loan forgiveness program while the legal battles continues to play out. In the meantime, the court issued an administrative stay, which has temporarily blocked the student loan forgiveness program for nearly two weeks. That temporary stay remains in effect while the court considers legal arguments regarding a preliminary injunction.
Biden Blames Republicans For Blocking Student Loan Forgiveness As Midterms Approach
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 application for our Administration’s student debt relief,” Biden said. “Close to 26 million Americans have already given us the information to be considered for this life-changing relief. And, as of this week, [the Education Department] will have approved 16 million applications... But that relief is on hold – because Republican elected officials are doing everything they can to deny it, even to their own constituents.”
The Republican coalition’s main argument in their case before the 8th Circuit is that Biden’s student loan forgiveness initiative financially harms the states because state-affiliated FFELP agencies — agencies that help operate an older federal student loan program that involves commercial lenders — will be deprived of revenue as a result of the debt cancellation.
But the Biden administration has countered this argument by noting that commercially-held FFELP loans do not qualify for the initiative as of September 29, before any student loan forgiveness application was available (let alone approved). Justice Department attorneys also pointed out that MOHELA, one of the primary FFELP agencies cited by the Republican state challengers, is an independent agency that can sue and be sued in its own name, and yet does not appear to be directly involved in the litigation.
MOHELA appeared to confirm this in correspondence to Rep. Cori Bush (D-MO) earlier this week. The agency indicated that its leadership was “not involved with the decision of the Missouri Attorney General’s Office to file for the preliminary injunction in federal court on September 29, 2022” and that MOHELA “does not exist to make profits.” Justice Department attorneys promptly forwarded the letter to the 8th Circuit.
Biden vowed to defeated the Republican-led challenges.
“We’re fighting these attacks from Republican elected officials in the courts,” he tweeted. “I will never apologize for helping working- and middle-class Americans as they recover from the pandemic.”
Borrowers Can Still Submit Student Loan Forgiveness Application
While this student loan forgiveness program is on hold as the 8th Circuit’s temporary order remains in effect, Biden’s comments confirm that the Education Department can still receive and process student loan forgiveness applications. His comments also suggest that the administration is able to rapidly process the forms, given that there have been 16 million approvals in a matter of weeks since the application first went live.
“We will continue to review applications” even while the 8th Circuit’s temporary stay remains in effect, says a message on the application website.