Student Loan Forgiveness: Biden Administration Begins Student Loan Debt Forgiveness Process
The Biden administration kicks off its efforts to forgive student loan debt on Thursday, sending out updates on the process via email ahead of the opening of the application window next month.
In August, President Joe Biden announced his decision to forgive up to $10,000 in student loan debt for people earning less than $125,000 a year or up to $20,000 for eligible borrowers who are also Pell Fellowship recipients.
An email from the Department of Education sent to Americans who signed up for updates and obtained by CNN on Thursday provided some details on who is eligible and what to expect in the process.
“In October, the US Department of Education will launch a short online application for student debt relief. You will not need to upload any supporting documents or use your FSA ID to submit your application,” the email states.
He continued: “Once you submit your application, we will review it, determine your eligibility for debt relief and work with your loan officer(s) to process your relief. We will contact you if we need additional information from you.
The email said additional updates would be sent “over the next few days”, but did not provide a specific date in October when the application window would open. It will run until December 2023. He also warned readers to “beware of scams”.
“You might be contacted by a company telling you that they will help you get a loan discharge, forgiveness, cancellation or debt relief for a fee. You never have to pay for aid with your federal student aid. Be sure to only work with the U.S. Department of Education and our loan services, and never reveal your personal information or account password to anyone,” he said. .
The Department of Education is “working closely” with the White House throughout the implementation process, a department spokesperson said, and meets daily.
“Our goal is to provide borrowers with a seamless and simple experience, working closely with the services that will actually process the relief,” the spokesperson said in a statement to CNN.
Biden’s decision on student debt has opened up new divisions inside and outside his party. While some supporters hailed the decision, progressives say it didn’t go far enough, some Democratic economists warned it could worsen inflation, but other economists say the combined impact will be minimal on the economy as a whole while Republicans say it’s unfair and costly. The nonpartisan Congressional Budget Office said in a report Monday that cancellation could have a price tag of $400 billion, but noted that those estimates are still “highly uncertain.”
The White House argues that the cost should be considered over a 30-year period.
And in one of the first major legal challenges to the loan cancellation plan, a public interest lawyer filed a lawsuit on Tuesday arguing that the policy is an abuse of executive power. Plaintiff Frank Garrison claims that due to the upcoming student loan forgiveness, he will be forced to pay taxes on the canceled amount – an expense he would otherwise avoid.
The lawsuit, which names the Department of Education as a defendant, challenges the agency’s “unacceptable abuse of executive power to restore the rule of law and uphold the Constitution’s separation of powers,” according to a statement from Pacific Legal Foundation Press.
White House spokesman Abdullah Hasan said in an emailed statement that “this claim is baseless for one simple reason: No one will be forced to get debt relief. Anyone who does not want debt relief can opt out.
This story has been updated with additional information.