President Joe Biden is continuing to pursue his plan to cancel up to $20,000 in student debt for millions of Americans and announced that more than 16 million Americans have been approved for the program.
The update provided a state-by-state breakdown of this figure and showed that more than 16.48 million of those borrowers’ applications had been fully approved by the Department of Education and sent to loan servicers. However, the White House noted that the student debt relief hasn’t been able to go through because of various lawsuits challenging the program.
“Overall, more than 40 million borrowers would qualify for the Biden Administration’s debt relief program,” the White House stated. “Nearly 90% of the benefits of the relief going to out-of-school borrowers would go to those earning less than $75,000 per year. Millions of those borrowers could be experiencing the benefits of that relief today—were it not for lawsuits brought on by elected officials in some of their own states.”
Lawsuits Block Debt Cancellation
Within days of Biden announcing his debt cancellation program, both Republicans and Democrats criticized the idea. The program also quickly drew several legal challenges, and in November 2022, the 8th Circuit Court of Appeals granted an injunction sought by the Republican attorneys general of Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina. The injunction blocked the program from moving forward.The Republican attorneys general argued that Biden’s plan couldn’t proceed because it wasn’t authorized by Congress. They also said the plan would unfairly burden working-class families and further worsen inflation.
Another lawsuit, brought by the Job Creators Network Foundation Legal Action Fund, a small-business advocacy group, argued that the rollout of the debt cancellation plan violated the Administrative Procedure Act’s notice-and-comment procedures by not first giving the public a period of time to provide input and comment about the program.
The Republican attorneys general have argued that Biden’s claim that COVID-19 constitutes an emergency is undercut by the fact that he had described plans to cancel student debt as part of his 2020 presidential campaign.
“The Act requires a real connection to a national emergency,” the attorneys general said. “But the Department’s reliance on the COVID-19 pandemic is a pretext to mask the President’s true goal of fulfilling his campaign promise to erase student loan debt.”
The Price Tag
Exact totals for the cost of the debt cancellation plan are a matter of debate.The Biden administration believes that the student debt cancellation plan will cost about $30 billion per year over the next 10 years, for a total cost of $300 billion over the next decade.