The Biden administration has called out conservative states for blocking the President’s plan for student loan debt forgiveness. On Friday, administration officials shared that hundreds of thousands of borrowers in states challenging the plan were approved for relief before it was blocked by the courts.
Nationwide, about 26 million borrowers applied for the relief during the few weeks applications were open last fall, and more than 16 million were approved. However, two separate court cases halted the debt forgiveness plan late last year. On a call with reporters, administration officials said that Republican leaders in some states were responsible for blocking the plan.
“The new data comes as elected officials and opponents of this plan are actively blocking many of their own constituents from getting relief, deciding instead to put special interests first,” said Jordan Matsudaira, the chief economist at the Education Department. He specifically referenced Missouri, where roughly 305,000 borrowers were approved for loan forgiveness.
The Biden administration announced in August of last year a plan to forgive up to $20,000 in student loan debt for borrowers who make less than $125,000, or $250,000 for married couples. However, the plan has been challenged separately by six conservative states and the Job Creators Network Foundation Legal Action Fund, the latter on behalf of two student loan borrowers who weren’t eligible for the full relief under the plan.
The administration says a law passed after 9/11 gives the President the ability to forgive student loan debt in connection to national emergencies. The Supreme Court will hear arguments in late February, and a decision is expected by summer. The administration would not elaborate on whether it had an alternative plan to forgive debt should the Supreme Court strike down its plan.
States that have the largest number of eligible borrowers include: California: 1.5 million, Texas: 1.4 million, Florida: 1 million, New York: 1 million, and Pennsylvania: 743,000. Meanwhile, states with the fewest number of approved borrowers include: South Dakota: 46,000, Vermont: 33,000, North Dakota: 32,000, Alaska: 24,000, and Wyoming: 18,000.
Student loan payments are still paused, and the moratorium on student loan payments could last until June 30th. As part of the freeze, interest rates on student loans have been set at zero percent, and collections agencies have stopped their attempts to collect debts.