Over the weekend, 16 million borrowers received a letter from U.S. Secretary of Education, Miguel Cardona, as President Biden’s executive order for student loan forgiveness faces pushback in federal courts.
The letter reads:
This email provides you with an update on the one-time Student Loan Debt Relief plan that President Biden and I announced on August 24th.
We reviewed your application and determined that you are eligible for loan relief under the Plan. We have sent this approval on to your loan servicer. You do not need to take any further action.
Unfortunately, a number of lawsuits have been filed challenging the program, which have blocked our ability to discharge your debt at present. 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. We will update you when there are new developments.
U.S. Secretary of Education Miguel Cardona
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The federal Student Aid website also shows that applications are no longer being accepted as they work to overturn orders blocking the program.
Raymond Traendly, managing partner at TK Law, broke down why the relief program is up against a number of lawsuits, stating that opponents of the order don’t believe they should have to front the cost for federal loan recipients.
“The main argument that I’ve seen that I don’t believe is very valid, but is has a lot of potential from a political standpoint, is that you’re shifting the risk in obligation of I think the numbers are between 16 and 20% of the American population on 100% of the American population, and that in itself is an injustice,” Traendly said.
With high inflation spurred by government spending, Traendly said that many people are concerned further spending could be a problem.
Traendly adds that it is also a question of whether the executive branch exceeded its authority in making the decision.
“The executive branch isn’t allowed to make its own laws. That is for the legislature,” he said.
The Biden administration asked the U.S. Supreme Court to reinstate the plan, which would forgive up to $20,000 in debt for eligible borrowers.
“When people are trying to make these big decisions during the holidays about where to celebrate or how to celebrate, these things weigh on them very heavily,” Traendly said. “It’s something that affects a lot of people, and being in limbo is never a good feeling.”
He said that many people are upset and beginning to feel like pawns in a game.
“It seems like the only reason for any of it is for political gain, and that’s unfortunate,” Traendly said.
If the orders blocking the program are not overturned by the end of the year, borrowers can expect student loan repayments to resume in January 2023.
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