The White House announced two months ago that 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 a Pell Grant. Biden said during a speech that the online application takes “less than five minutes” to finish, adding that more than 8 million people have filed for loan forgiveness “without a glitch” on a beta site launched Friday.
“This is a game changer for millions of Americans,” Biden said. “It took an incredible amount of effort to get this website done in such a short time.”
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 slated to end in January. “As millions of people fill out the application, we’re going to make sure the system continues to work as smoothly as possible so that we can deliver student loan relief for millions of Americans as quickly and efficiently as possible,” Biden continued.
The student debt cancellation, however, has been the subject of multiple lawsuits. Several Republican state attorneys general filed a complaint earlier this month contending that the White House illegally bypassed Congress while drafting the student debt policy by invoking a law meant to aid Iraq War veterans and their families.
The attorneys general likewise pointed to the Supreme Court’s recent opinion in West Virginia v. EPA, which said that federal agencies are not able to assert “highly consequential power beyond what Congress could reasonably be understood to have granted.” A separate lawsuit from Attorney General Mark Brnovich (R-AZ) referred to the same ruling and argued that the “mass debt forgiveness program is fundamentally unfair, unconstitutional, and unwise.”
Another complaint from the Job Creators Network Foundation’s Legal Action Fund claimed that the policy violated the notice-and-comment processes mandated by the Administrative Procedure Act, which mandates that parties impacted by executive policy must have sufficient opportunity to comment on pending rule changes. Lawyers for plaintiffs Myra Brown and Alexander Taylor, both of whom did not qualify for the full amount of debt cancellation and were unable to communicate their views to the Department of Education, argued that the policy is meant to help Democratic candidates in the upcoming midterm elections.
“The administration’s action does nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments,” Job Creators Network Foundation President Elaine Parker said in a statement provided last week to The Daily Wire. “Colleges need to be held accountable for their outrageous tuition prices that fund high executive pay, an army of administrators who provide little-to-no value, and the construction of resort-style amenities.”
Analysts at the University of Pennsylvania’s Wharton School argued that a permanent loan cancellation announcement might lead students to “reorganize their financing toward additional borrowing.” Although the policy could increase access to higher education, universities themselves could benefit the most “in the form of higher prices” as they raise tuition.