On Tuesday, it was reported that President Joe Biden may try to forgive student debt again as early as October, in a sweeping redo effort that could impact tens of millions of Americans. But by Wednesday, seven Republican-led states have sued the U.S. Department of Education to block the Biden administration from carrying out its sweeping student loan forgiveness plan.
It’s hard to keep up. Here’s what we know…
Biden’s Plans for Student Loan Relief
The Biden administration is attempting to deliver aid roughly 14 months after the Supreme Court blocked it from carrying out its first student loan forgiveness plan. Just hours after the justices announced their ruling in June 2023, Biden vowed to find a new way to reduce or eliminate people’s education debt.
In the Spring 2024 Unified Agenda of Regulatory and Deregulatory Actions, the U.S. Department of Education disclosed that it will publish its final rule on student loan relief sometime in October.
Due to the timeline of regulatory changes, that would normally mean the administration wouldn’t be able to carry out its program until July 2025. However, the department could act sooner simply by publishing a notice in the Federal Register, noted higher education expert Mark Kantrowitz to CNBC.
In August, the Biden administration began sending emails to tens of millions of borrowers about its new plans to cancel student debt. It also offered borrowers the opportunity to opt out of the relief by Aug. 30 with their loan servicer.
The emails have been widely thought to be a strategy by the Biden team to show Americans that student loan forgiveness is at stake in the upcoming presidential election. “It shows the borrowers what they stand to lose if Republicans win,” Mark Kantrowitz told CNBC.
Related: How Presidential Elections Affect The Stock Market
Republican-Led States Sue to Block Biden’s Plans for Student Loan Relief
In a lawsuit, seven Republican-led states – Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota and Ohio – say the department’s new effort to forgive student debt, like its previous attempts, which were blocked by the courts, is illegal.
The states accuse the Biden administration of trying to “unlawfully… mass cancel hundreds of billions of dollars of loans” without approval from Congress and allege that the Education Department already instructed its loan servicers to begin canceling the eligible loans as early as Sept. 3, which would violate timing restrictions around the rulemaking process.
According to CNBC, a spokesperson for the Education Department declined to comment on the pending litigation.
Despite the legal challenges that have prevented the president from implementing wide-scale student loan relief, the Biden administration has still managed to cancel more of the debt than any other before it.
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