Biden suffers court setback on student loan forgiveness

Administration nevertheless presses borrowers to persist with their applications, saying it’s ‘more committed than ever’ to promise of $380 billion in relief for millions

October 24, 2022
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The Biden administration lost a round in its court battles to protect its student loan forgiveness programme but urged eligible borrowers to persist with their applications while the legal process plays out.

“We’re not deterred” by the more than half-dozen lawsuits filed against the White House commitment to offer an estimated $380 billion (£330 billion) in cancelled student loans, US education secretary Miguel Cardona said in a Twitter posting. “We are more committed than ever to provide debt relief to eligible Americans,” he said.

Dr Cardona offered the assurance after a series of back-and-forth court rulings on President Joe Biden’s decision to offer up to $20,000 per person in relief to help whittle away a nationwide accumulation of student debt estimated at more than $1.6 trillion among some 43 million borrowers.

In an initial couple of victories, a federal judge in Missouri dismissed outright one legal challenge of the forgiveness programme brought by six Republican-led states, and Supreme Court Justice Amy Coney Barrett rejected an emergency application from a taxpayer group in Wisconsin seeking to block the forgiveness programme.

But a federal appeals court in Missouri then revived the six-state lawsuit late last week by granting a preliminary injunction that temporarily blocked the government from actually cancelling any loans under the programme, and scheduling arguments in the coming week on whether the prohibition should remain in place while a full trial on the matter plays out.

The leader of the six-state coalition, Leslie Rutledge, the attorney general of Arkansas, cheered the appeals court ruling, saying: “Hardworking Americans who did not take on this debt should not be forced to shoulder this burden.”

Dr Cardona, however, urged borrowers to keep submitting applications for loan cancellation through a newly created portal on the Department of Education’s website, promising them his department’s staff will keep working on reviewing applications so the money can be quickly paid out once the legal obstacles have been cleared.

After just a week of the site in operation, 22 million people – more than half of the 43 million people with student loan debt – have signed up, White House officials said. Mr Biden visited Delaware State University to promote participation, calling the application a five-minute process that can be done “while hanging out with your friends”.

“This is a game-changer,” the president said. “We’re hearing from people all over the country. Over 10,000 students have written me letters so far. Literally, 10,000 so far.”

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