Biden moves forward with plan to cancel $39 billion in student loan debt
President Biden on Monday moved forward with his administration’s plan to cancel $39 billion in student loan debt for more than 800,000 borrowers after a judge dismissed a lawsuit seeking to block the plan.
Michigan District Judge Thomas Ludington declared Monday that a lawsuit filed by the Cato Institute and the Mackinac Center for Public Policy against the Department of Education lacks standing, throwing the case out.
The institutions argued in the suit that the administration’s plan to forgive loans from borrowers who have been paying back their loans for 20-25 years is unconstitutional and in violation of the Administrative Procedure Act.
“On Day One of my Administration, I promised to fight for hardworking families and to fix problems in the student loan system that have been failing borrowers for too long,” Biden, 80, said in a statement released by the White House on Monday.
“I’m proud that my Administration is delivering on that promise and has already approved over $116 billion in debt cancellation for 3.4 million Americans – no matter how many lawsuits, challenges, or roadblocks Republican elected officials or special interests put in our way,” he added.
The president said the loan cancellation plan, announced by Education Secretary Miguel Cardona in July, seeks to address “errors and administrative failures of the student loan system that started long before I took office.”
“When I came into office, hundreds of thousands of borrowers weren’t accurately getting credit for student loan payments that should have delivered them forgiveness under Income-Driven Repayment plans or were placed into forbearance by loan servicers in violation of Department of Education rules,” Biden claims.
“Under these plans, if a borrower makes 20 or 25 years’ worth of payments, they get the remaining balances of their loans forgiven.”
ABC News reported Monday that some of the 804,000 borrowers who qualify for the plan will receive emails from their servicers with the subject line, “Your student loans have been forgiven.”
The process of notifying individuals is expected to be complete in a “matter of weeks,” according to the outlet.
About 614,000 borrowers are expected to have their entire student loan debt wiped up under the plan.
In June, the Supreme Court struck down Biden’s attempt to write off hundreds of billions of dollars in federally held student loan debt, ruling that the commander-in-chief had overstepped his executive authority.
On Monday, Biden said his latest effort to cancel debt is an example of one of the “alternative” paths his administration has chosen to provide relief to some borrowers.
“As I announced earlier this summer in the wake of the Supreme Court’s decision on our student debt relief plan, we will continue to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible. We will use every tool at our disposal to get student loan borrowers the relief they need to reach their dreams,” the president said.
Since Biden took office, the Education Department has forgiven more than $116.6 billion in federal debt held by more than 3.4 million students.