Biden Administration Walks Back Debt Relief Amid Legal Challenges
(UnitedVoice.com) – Forgiving student loan debt is one of the top priorities for the far-left. Many Progressives, like Rep. Alexandria Ocasio-Cortez (D-NY), have campaigned on the promise for years. In 2021, Speaker of the House Nancy Pelosi (D-CA) threw cold water on the plan by announcing that President Joe Biden didn’t have the authority to spend billions of taxpayer dollars to forgive the money owed. She made it clear the power of the purse lies with Congress, and debt forgiveness would require an act by lawmakers. A year later, that all went out the window.
In August, Biden announced a massive plan to forgive student loan debt for millions of Americans. Just over a month later, the president is walking back part of his plan, snatching forgiveness back from the desperate clutches of former students.
Biden Reverses Course
On Thursday, September 29, the Department of Education announced those who have privately held Perkins Loans or Federal Family Education Loans (FFEL) were no longer eligible to consolidate the debt into Direct Loans and apply for relief. Those who applied to consolidate before September 29, however, were still eligible.
The Department asserted it’s now “assessing whether there are alternative pathways” to relief for those who have privately-held loans. Newsmax reported that over 4 million borrowers have FFEL loans. Why the administration made the change is not entirely clear. However, there are already lawsuits threatening the viability of Biden’s plan.
The Pacific Legal Foundation has filed a lawsuit against Biden, hoping to stop the forgiveness program in its tracks. In another legal challenge, Iowa, Arkansas, Nebraska, Kansas, South Carolina, and Missouri reportedly sued over the relief program. The states argued that the administration’s decision to allow FFEL borrowers to consolidate their loans into federal loans causes banks to lose money.
Biden’s Forgiveness Program
When Biden announced his plan to forgive loan debt, he said everyone who made under $125,000 per year (or $250,000 for married couples) would qualify for up to $10,000, which increased to $20,000 for those who received Pell Grants.
Republicans spoke out about it almost immediately. They aren’t upset about helping people in need but have warned about the possible implications more government spending might have on inflation, especially in light of the announcement that it will cost about $400 billion over 30 years, according to the Congressional Budget Office. Now, the president is going to spend an unknown amount to fight in court, while people who just weeks ago thought the government had forgiven their loans are back at square one.
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