The Biden administration is on track to move forward with canceling approximately $39 billion in student debt for those who have been making payments for long periods of time. On Monday, a federal judge dismissed a lawsuit that sought to challenge this plan.
The economic relief plan was put into place to bring some reprieve to the 804,000 long-term borrowers across the country, who have been burdened with student loan debt for decades. The lawsuit was issued by the Cato Institute and the Mackinac Center for Public Policy and argued that the administration overstepped its power. However, Michigan District Judge Thomas Ludington ruled against the lawsuit for lack of standing.
In a statement released by the White House, President Biden promised to “fight for hardworking families and to fix problems in the student loan system that have been failing borrowers for too long.” According to the statement, borrowers who have made payments for over 20 years will start to receive credit and loan forgiveness. It is estimated that almost 614,000 borrowers will receive full forgiveness for the balance of their debt.
The ruling follows recent news that the administration has already canceled over $116 billion in student loan debt for 3.4 million borrowers. Secretary of Education Miguel Cardona said, “We are standing up for borrowers who did everything right, but whose progress towards forgiveness went uncounted due to past administrative failures that the Biden-Harris team has worked tirelessly to correct.”
The emails sent out to qualifying borrowers state “Your student loans have been forgiven” with the promise of a debt-free life on the horizon.
Sheng Li from the New Civil Liberties Alliance, the group that filed the lawsuit on the institutions’ behalf, stated “The district court did not rule on the merits of the case and instead said Cato and Mackinac were not the right parties to bring it.” Li added, “We disagree with the court’s conclusion regarding legal standing and are reviewing legal options with our clients.”
It is clear that the Biden administration is committed to bringing much-needed relief to an estimated 804,000 borrowers across the United States of America. With the recent dismissal of the suit, the federal government is moving forward with delivering this much-needed economic relief plan.