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In August 2022, President Joe Biden announced his Administration’s plan to provide up to $20,000 in debt relief to borrowers earning less than $125,000 a year. The Administration’s program was intended to protect borrowers at higher risk of delinquency or default as a result of hardship caused by the COVID-19 pandemic when the payment pause ended.
However, in November of last year, less than a month after the request was first published, the Department was forced to stop accepting applications as a result of lawsuits filed by opponents of the program. Thus, the loan servicers were prevented from repaying any debt.
The program considers a legal challenge brought by a coalition of states led by the Republican Party and millions of borrowers will remain in limbo until a court ruling is expected this summer.
According to the White House, new data providing a state-by-state breakdown shows that more than 61% of the 26 million people who have applied or are automatically eligible according to the information sent to the Department of Education they have completed their applications. They have been approved and sent to loan servicers for download.
“More of 40 million people would qualify for the debt relief program which was intended to alleviate debt amid difficulties related to the pandemic,” the White House said.
For now the debt relief application has been removed from their website and the Biden administration is preparing to present its case in court when oral arguments begin on February 28.
At the beginning of this year the Biden administration asked the Supreme Court to uphold its student loan forgiveness plan. Lawyers for the US Department of Education and the US Department of Justice noted challenges to the future plan filed by parties who failed to show harm from the policy that is usually a requirement to establish so-called legal status.
It may interest you:
– Biden Administration asks Supreme Court to uphold student loan forgiveness plan
– Student loans in the US: Court rejects Biden’s request to restore the relief program
–Student debt relief plan will be investigated by Republicans when they take control of the House.