Biden: 16 Million Student Borrowers Getting Relief This Week

Biden: 16 Million Student Borrowers Getting Relief This Week

Despite the temporary suspension placed on the student debt relief program by a federal judge, President Joe Biden said that relief will arrive for 16 million borrowers by the end of the week.

 

Despite Republican-led legal challenges to the student loan forgiveness plan, President Joe Biden on Thursday confirmed that 16 million Americans who applied for debt relief will be approved by the end of the week, according to a Bloomberg report.

“By the end of this week, the Department of Education will have approved applications of sixteen million Americans and sent the necessary paperwork to student loan servicers—the last step before the sixteen million Americans can have their loan discharged,” the president said in remarks at Central New Mexico Community College in Albuquerque, New Mexico.

 

These individuals “should be seeing relief in the coming days,” he continued.

As for the ongoing legal challenges to the program, Biden contended that “their outrage is just simply wrong, and I might add … I’m not being too political here, but hypocritical.”

Last month, a federal appeals court issued an administrative stay temporarily blocking Biden’s plan to cancel billions of dollars in federal student loans.

In a White House statement, the administration added that “if Republican officials get their way, tens of millions of Americans’ monthly costs will rise dramatically when student loan payments resume next year.”

“Working and middle-class Americans … will remain under the burden of loan debt—preventing them from pursuing the dream of homeownership, saving up for retirement, or starting small businesses,” it continued.

The Biden administration started taking student debt cancellation applications in mid-October, and officials have said that it could take weeks to process and grant relief. The White House has said that 26 million Americans already have sent in their applications for the program.

White House press secretary Karine Jean-Pierre has continued to encourage eligible borrowers to apply for relief.

The “temporary order does not prevent borrowers from applying for student debt relief,” she said in a statement.

“It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers,” she added.

Under the student-loan relief plan, those with federal student loans who make under $125,000 annually, or couples earning less than $250,000, qualify for up to $10,000 in forgiveness. But if a borrower received a Pell Grant to attend college, they could potentially get up to $20,000 in relief.

Additionally, the student loan announcement extended the moratorium on repayments until January and created a new income-driven repayment (IDR) plan, designed to assist people who have a difficult time making large monthly payments. This will allow borrowers to pay no more than 5 percent of their monthly income on undergraduate loans, a sizable decrease from the current 10-percent threshold.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.