Republican States and Biden Square Off Over Student Debt Cancellation

It’s a college rivalry for the ages— but not between football teams. On September 29th, six Republican-controlled states sued the Biden administration over its student debt relief program. The attorneys general for Alaska, Iowa, Kansas, Nebraska, Missouri, and South Carolina filed suit in federal court in Missouri. The petition calls the program “economically unwise and downright unfair” to those who already paid off their debt, and claims that it is an overreach of executive power. 

The program, which was announced in late August, is open to over 45 million borrowers with federal student loans. Borrowers are eligible for up to $10,000 in loan forgiveness, or up to $20,000 for recipients of Pell Grants. The income cap for eligibility is $125,000 for individuals and $250,000 for spouses who file taxes jointly. 

The loan cancellation program is based on the Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which empowers the Secretary of Education to “waive or modify any requirement or regulation applicable to the student financial assistance programs” during national emergencies. The law was passed in the wake of 9/11 and aimed towards military personnel, with petitioners arguing that Biden’s use of the law is not narrowly tailored. Memos from the Department of Justice and the Department of Education assert that the COVID-19 pandemic is a national emergency, therefore meeting the requirements of the HEROES Act. 

The program has also drawn criticism for its expense. The Congressional Budget Office issued a report in late September estimating that the plan could cost around $400 billion; the agency estimates that 90% of eligible borrowers will apply for loan forgiveness. The Department of Education has issued its own estimate, saying the program will cost around $379 billion over its lifetime and estimating that only 81% of eligible borrowers will apply for relief. 

On the same day the suit was filed, the Department of Education announced that privately held federal student loans (loans held by private companies but guaranteed by the government) that were not converted to direct federal loans before September 29th would no longer be eligible for relief. The announcement excludes about 700,000 previously eligible people. The change was a move to ward off the suit, as the states claim the program will cause financial harm to their public loan servicing agencies.  

The application for federal student loan forgiveness is set to open in early October, but the legal challenges could cause delays. Borrowers can sign up for email updates on the Department of Education website to be notified when the application is available. The application will be open until December of 2023. However, Department of Education officials recommend that borrowers apply before November 15 if they want to take advantage of the federal loan payment pause. The payment pause has been in effect since March of 2020 and is set to expire in January 2023.  

Website | + posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Related

Project 2025: A Conservative Hostile Takeover

As the 2024 presidential election nears, conservatives led by The Heritage Foundation’s Project 2025 blueprint reports preparing for a significant shift in governance. Should Donald Trump win the presidency, the project would initiate an extensive overhaul, replacing key government employees identified with ‘woke’ ideologies and policies in exchange for vetted loyalists. In the White House, […]

Mayorkas Impeached

On February 13, 2024,  Secretary of the Department of Homeland Security, Alejandro Mayorkas (he/him), was impeached by the United States House of Representatives. Mayorkas is being impeached for a “breach of public trust” and “willful and systemic refusal to comply with the law” by House Republicans, led by Speaker Mike Johnson (he/him, LA-04). The vote […]

UNRWA Under Investigation for Alleged Hamas Ties

  A report released on January 26 alleges that UNRWA (United Nations Relief and Works Agency for Palestine Refugees in the Near East) had 12 staff members aiding Hamas in the October 7 attacks against Israel, which led to the military campaign against Hamas in the Gaza Strip. This newfound evidence has resulted in the […]