ORLANDO, Fla. – News 6 was with U.S. Secretary of Education Miguel Cardona, when he got the news that the Biden Administration can — at least temporarily — move forward with student loan forgiveness.
“This ruling today, I look forward to looking at the details of it again. I just think it’s important. It’s a step in the right direction,” he told News 6.
Cardona was in Central Florida to visit the 2024 National Blue Ribbon School NeoCity Academy in Kissimmee. He is the main advisor to President Joe Biden on education policies and programs.
The sweeping student loan forgiveness program is poised to help tens of millions of Americans. Seven Republican states, including Florida, filed a lawsuit earlier this year claiming his department’s new debt cancellation effort was illegal and would transfer massive debt obligations to taxpayers.
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“Last year, the Supreme Court struck down Biden’s illegal attempt to force Americans to pay off someone else’s debt,” Florida Attorney General Ashley Moody said at the time. “Now, Biden thumbs his nose at the court like he has done with so many issues, including immigration, and does what he wants, trying again to mass-cancel student debt. We will fight in court to make sure that hard-working Americans, who are struggling to buy groceries thanks to Biden, are not on the hook for other people’s debt.”
But on Thursday, a Republican-appointed judge ruled President Biden could move forward with the plan. News 6 also asked him if there was a long-term solution.
“I have to read the details of what was announced today, but I will tell you everyone that talks about debt realizes that interest has gotten out of control. Just runaway interest in trying to tap people that have paid their loans for over 20 years and still owe more than they borrowed. And that’s also fine. You know, people take out loans to go to college and have, income to help their families. They shouldn’t be required to pay more 20 years later than what they took out,” he said.
Four groups of borrowers are expected to be affected. Those who took out more than they originally took out, people who have been in a repayment plan for decades, students from schools with low financial value and those who qualify for loan forgiveness under an existing program but have not yet applied.
The judge has directed the case to be transferred to Missouri because the state claims Biden’s plan would most harm the Missouri Higher Education Loan Authority (MOHELA).
Missouri is suing on behalf of MOHELA, a student loan servicer that was created by the state and is hired by the federal government to help collect student loans. In the suit, Missouri argues that cancellation would hurt MOHELA’s revenue because it’s paid based on the number of borrowers it serves.
In their lawsuit, the Republican states argue that the Education Department had quietly been telling loan servicers to prepare for loan cancellation as early as Sept. 9, bypassing a typical 60-day waiting period for new federal rules to take effect.
The courts are now asking the Missouri court to act quickly saying the Education Department could “unlawfully mass cancel up to hundreds of billions of dollars in student loans as soon as Monday.”
Also joining the suit are Alabama, Arkansas, Florida, North Dakota and Ohio.
The Associated Press contributed to this report.
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