The Biden-Harris Administration released new data regarding the one-time student debt relief. Twenty-six million people in the U.S. applied or were automatically eligible for the relief program. This data comes into light as other elected officials try to actively block their own constituents from getting that same relief through lawsuits against the program.
In August, President Biden announced the plan to provide up to $20,000 in debt relief for borrowers earning less than $125,000 per year. This comes as a result of the hardship brought on by the pandemic, and to protect borrowers most at risk of committing misdemeanors by not being able to pay their debt back.
Once the application was available, 26 million people either applied for debt relief or had already provided sufficient information to the Department of Education (Department) to be deemed eligible for relief. Out of those who applied, 16 million borrowers were fully approved by the Department and sent to loan servicers. In Illinois, over a million applications were submitted, and 679,00 of those applications were fully approved.
One of those applicants was a student here at IWU. As a first-generation undergraduate student, sophomore elementary-education major Hannah Kocar decided to apply for the program to relieve herself and her family of federal loans after she graduates.
“By the end of my four years here, I’m going to have a very large amount of debt that I’m not sure I’ll ever successfully pay off,” Kocar said. “When I was approved, it was a very large relief for my family and I. Some of the stress about the future and my financial comfort had dissipated because there was hope now”.
In November of last year, the program faced many lawsuits in opposition and was required to stop accepting applications. Six GOP-led states argued in one of the lawsuits that the loan relief program threatens their future tax revenues and that the plan circumvents congressional authority. Finally, the Biden administration temporarily halted the program, preventing loan servicers from discharging any debt. Forty million borrowers could qualify for the Biden Administration’s debt relief program, if not for lawsuits brought on by elected officials in some of their own states.
“I was frustrated, a little more of the anxiety from before was back and that was a really unsteady feeling,” Kocar said when she received the news from her mom that the program was paused. “I would love to have hope for the future but as of right now, I feel more of the fear. All of the ease I had before has pretty much disappeared and now I’m afraid that I’m being hopeful for no reason.”
Payments on federal student loans were set to resume this January after a years-long pause due to the pandemic, but the Biden administration extended the pause on federal student loans payments later into 2023. Unless extended again, or until the Supreme Court makes a final decision regarding the legality of the debt-relief program, repayment of federal loans will resume after June 30, 2023.
“We believe strongly that the lawsuits are meritless, and the Department of Justice has appealed on our behalf. Your application is complete and approved, and we will discharge your approved debt if and when we prevail in court,” wrote Secretary of Education Miguel Cardona in an email to applicants.
The court trials will occur in February, and the relief-program is on hold until further notice.