The Department of Education has stopped allowing federal student loan borrowers to apply for forgiveness after a federal judge ruled last night that the administration overstepped its authority.
While before the ruling, a judge issued a stay on executing the plan, the administration continued accepting applications because the stay was considered “temporary.” Thursday’s ruling will need to be appealed.
The Biden administration said it disagreed with the ruling and would appeal.
“For the 26 million borrowers who have already given the Department of Education the necessary information to be considered for debt relief - 16 million of whom have already been approved for relief – the Department will hold onto their information so it can quickly process their relief once we prevail in court,” White House press secretary Karine Jean-Pierre said.
Proponents of student loan forgiveness point out the rising cost of education in recent decades. The cost of tuition at a public four-year university in 2020-21 averaged $9,400, up from $8,500 from a decade earlier, when adjusted for inflation.
Government data shows that in the last three decades, the cost of attending a public university, which is generally far more affordable than a private one, has doubled. In the last 40 years, the cost has tripled.
A student attending a public university from 2017-21 would be expected to pay $38,093 in tuition and mandatory fees, in 2021 dollars. A person who attended a public university in 1977-81 would have been expected to pay $10,335 in 2021 dollars.
Opponents of Biden's plan say it’s too costly. The Congressional Budget Office said the cost for the government to forgive student loans is an estimated $400 billion.
Biden's plan calls for borrowers with incomes of up to $150,000 to receive up to $10,000 in federal student loan forgiveness. That amount increases to $20,000 for borrowers who received pell grants.
