The Biden administration began notifying Americans who applied for student loan forgiveness on Saturday that their requests had been greenlit, even as the controversial policy continues to move through the federal court system.
President Joe Biden unveiled a website last month where Americans could provide basic information to determine eligibility for debt forgiveness. Some applicants received an email from Education Secretary Miguel Cardona saying they were “eligible for loan relief” after a review of their submission, according to a report from Business Insider. “We have sent this approval on to your loan servicer,” the message said. “You do not need to take any further action.”
Cardona affirmed on social media that applicants should not “worry” if they do not immediately receive the email since “more are coming.” He added that the administration remains confident in its legal authority to execute the program.
Indeed, the promise of loan cancellation occurs despite multiple lawsuits challenging the plan, which is on hold after a ruling from the U.S. Court of Appeals for the Eighth Circuit.
Solicitor General Elizabeth Prelogar asked the Supreme Court last week to rule on whether the administration’s policy can continue. “The Eighth Circuit’s erroneous injunction leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations,” she contended.
If the policy survives the legal challenges, the Department of Education would cancel $10,000 in student debt for millions of borrowers earning less than $125,000 per year, as well as $20,000 for students who attended college via Pell Grant.
The lawsuit granted standing from the Eighth Circuit was filed by multiple Republican state attorneys general who asserted that the White House illegally bypassed Congress while drafting the student debt policy. The officials pointed to the recent Supreme Court opinion in West Virginia v. EPA, which said that federal agencies cannot assert “highly consequential power beyond what Congress could reasonably be understood to have granted.”
“In addition to being economically unwise and downright unfair, the Biden Administration’s Mass Debt Cancellation is yet another example in a long line of unlawful regulatory actions,” the complaint argued. “No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed.”
The loan cancellation policy comes after the passage of multiple large legislative packages, including the Inflation Reduction Act and renewed military and humanitarian aid for Ukraine. One estimate from the Congressional Budget Office predicts that the overall cost of the loan cancellation could reach $400 billion, with another $20 billion incurred by an extended pause on federal student loan repayments currently slated to end in January.
Biden’s legislative allies broadly support the legislation, although outgoing House Speaker Nancy Pelosi (D-CA) once expressed doubt as to whether the commander-in-chief has the authority to unilaterally cancel federal debts without action from Congress. During a recent interview, Sen. Elizabeth Warren (D-MA) remarked that former President Donald Trump and former President Barack Obama set similar precedents during their respective tenures.
“Look, I’d be delighted to codify what the president is doing, but here’s the key: I don’t have any doubt that the president has the legal authority to cancel this student loan debt,” she commented. “But we have a court down in Texas, and if they’re going to play politics instead of actually following the law, they do put the program at risk.”