President Joe Biden’s attempt at fulfilling a campaign promise to cancel $10,000 in student loan debt per borrower was met with relief. Well, unless you’re a conservative bent on keeping an entire class of under the thumb of crippling debt. But if you’re reading this, you’re probably not that kind of a person; instead, you’re wondering what the hell is happening with federal student loan forgiveness.
The most important thing to know is that multiple federal courts have temporarily blocked the debt relief program under the Department of Education. Judicial action has meant the Education Department isn’t even accepting new applications at this time; however, they are maintaining already submitted applications. In a bolded statement on the application website, the department wants borrowers to know it’s working on fixing this: “We are seeking to overturn those orders.”
On Friday, the Biden administration asked the Supreme Court to allow loan forgiveness to begin. Solicitor General Elizabeth Prelogar wrote in a filing with the Supreme Court that the legal limbo by dueling court cases “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.”
No duh! It’s great to see the Biden Administration taking steps to address a looming problem for a Congress whose lame-duck session is quickly ending. But the biggest worry is when repayments—and interest accrual, the real financial cudgel in this whole process—will begin. When Biden announced federal student loan forgiveness, he also told the American people that this really was the final repayment pause. Payments and interest accrual would begin again in January 2023, goddammit! However, this was before multiple lawsuits threatened to draw out the forgiveness process at best, or completely derail it, at worst.
The Biden Administration argued in its filing that Congress has already given its authorization for such a program through the Higher Education Relief Opportunities for Students Act of 2003, or the HEROES Act. “Because borrowers who default on their student loans face severe financial consequences – including wage garnishment, long-term credit damage, and ineligibility for federal benefits – Congress specifically authorized the Secretary to waive or modify any applicable statutory or regulatory provision as he deems necessary to ensure that borrowers affected by a national emergency are not worse off in relation to their student loans,” the filing said.
Now, advocates and student debt holders are demanding the White House extend the coronavirus-era repayment pause. As the forgiveness plan makes it way through the federal courts, the timeline to those accounts coming up $0 keeps extending. The Associated Press reported that nearly 26 million have applied for debt relief, of about 43 million eligible. Do those people just stay in limbo? By not acting, the Biden administration is putting every applicant in an untenable position. Do you pay, even if you already applied for forgiveness? Can you even pay, which is the core reason for the forgiveness process existing at all?
“Borrowers do not feel that the pandemic is over, they do not feel that the economic impacts are over,” Natalia Abrams, president of the Student Debt Crisis Center, told the AP. “We need to pause payments until all legal hurdles are cleared.”