The Biden administration has begun emailing student borrowers who have been approved for forgiveness despite lawsuits challenging the administration’s relief package.
Although applications are no longer being accepted as a result of the lawsuits, more than 26 million borrowers submitted applications in the roughly one-month window in which submissions were accepted. In the e-mails distributed, the borrowers are informed of their approval as well as the legal proceedings contesting the issuance of the exemption.
“Unfortunately, a number of lawsuits have been filed challenging the program which have blocked our ability to repay your debt at this time,” said the email from US Department of Education Secretary Miguel Cardona. “We strongly believe the lawsuits are without merit, and the Department of Justice has appealed on our behalf.”
The debt, the letter says, will be discharged “if and when we prevail in court.”
A day earlier, the Justice Department had asked the Supreme Court to overturn one of the lower court rulings challenging the program, warning that many Americans would face financial hardship if the plan remains stalled.
In one of the challenges, a federal judge in Texas ruled that the plan exceeded the authority of the White House. Prior to that, a federal appeals court in St. Louis temporarily suspended the plan while it considered a challenge from six Republican-led states.
Still, lawyers believe the administration will succeed in court.
“We’re really confident they’ll find a way to write off people’s debt,” said Katherine Welbeck of the Student Borrower Protection Center.
Biden’s plan promises $10,000 in federal student debt forgiveness to those with incomes below $125,000 or households earning less than $250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for additional assistance of $10,000.
Experts say student loan forgiveness has the potential to end up in the Supreme Court, meaning it could be a long process.