Education Department Will Move ‘Full Speed Ahead’ With Loan Relief
Although a federal judge temporarily suspended the federal student debt relief program, the Education Department noted that it is lawfully moving “full speed ahead” with the program’s preparations.
Education Secretary Miguel Cardona confirmed over the weekend that the Department of Education is “moving full speed ahead” with preparations for its student loan debt relief program even though a federal appeals court temporarily blocked the program on Friday, Axios reported.
“Amid some Republicans trying every which way to block the Biden Administration’s debt relief program, the department is moving full speed ahead with preparations for the lawful implementation of our program so we can deliver relief to borrowers who need it most,” Cardona wrote in a USA Today op-ed published on Saturday.
“Already, 22 million people have provided the department with the necessary information we need to review their eligibility for student debt relief,” he continued.
Meanwhile, White House press secretary Karine Jean-Pierre encouraged those eligible for debt forgiveness to still apply for the program shortly after the plan was blocked by the U.S. Court of Appeals for the 8th Circuit amid a legal challenge from six Republican-led states.
Cardona joined the Biden administration in pledging to fight the lawsuits. “We promise to fight to protect you from baseless lawsuits trying to stop us from providing you debt relief,” Cardona said in a video posted to Twitter on Saturday. “We will not stop fighting for you.”
On Thursday, the Biden administration received two big wins as Supreme Court Justice Amy Coney Barrett rejected a challenge to the program brought by a Wisconsin taxpayers group, and in Missouri, a federal judge threw out a lawsuit brought by six Republican-led states.
Under the student-loan relief plan, those with federal student loans who make under $125,000 annually, or couples earning less than $250,000, qualify for up to $10,000 in forgiveness. But if a borrower received a Pell Grant to attend college, they could potentially get up to $20,000 in relief.
Since the student loan announcement, the White House updated the program to exclude borrowers with privately held federal student loans. The policy change is centered on those who initially took out both Perkins and Federal Family Education Loans (FFEL), which were issued and managed by private banks but guaranteed by the federal government. Roughly 700,000 people will be affected by the change, according to the Biden administration.
Furthermore, the student loan announcement extended the moratorium on repayments till January and created a new income-driven repayment (IDR) plan, designed to assist people who have a difficult time making large monthly payments. This will allow borrowers to pay no more than 5 percent of their monthly income on undergraduate loans, a sizable decrease from the current 10-percent threshold.
Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.
Image: Reuters.