This past Monday, President Joe Biden announced that he and his administration had successfully set up a website on which people could apply to receive his promised student debt cancellation.
An announcement from two months ago by the White House stated that the Department of Education would be canceling $10,000 in student loan debt for multiple millions of borrowers earning less than $125,000 per year, up to $20,000 for any students who attended college via a Pell Grant. Biden stated as part of a speech that the online form takes “less than five minutes” to finish, stating that almost 8 million people have already put in applications for the promised loan forgiveness “without a glitch” on a beta site that kicked off this past Friday.
“This is a game changer for millions of Americans,” stated Biden. “It took an incredible amount of effort to get this website done in such a short time.”
The Congressional Budget Office issued an estimate which predicts that the total cost for this loan cancellation plan could climb up to almost $400 billion, along with another $20 billion tacked on by an extended pause surrounding the federal student loan repayments which are now slated to come to an end as of this coming January. “As millions of people fill out the application, we’re going to make sure the system continues to work as smoothly as possible so that we can deliver student loan relief for millions of Americans as quickly and efficiently as possible,” Biden went on to state.
This student debt cancellation plan has been the target of quite a few different lawsuits. Many Republican state attorneys general filed official complaints this past month contending that the White House illegally went over the head of Congress while creating the new policy concerning student debt by harkening back to a law created to assist veterans of the Iraq War and their families.
Another massive complaint came from the Job Creators Network Foundation’s Legal Action Fund which claimed that the policy was in total violation of the notice-and-comment processes ordered by the Administrative Procedure Act, which makes it so that parties impacted by executive policy must have enough opportunity to comment on pending rule changes. The legal steams for plaintiffs Alexander Taylor and Myra Brown, both of whom did not officially qualify for the total amount of debt cancellation and were not able to speak freely about their views to officials to the Department of Education, made the argument that the policy is meant to assist Democratic Candidates in the upcoming midterm elections.
“The administration’s action does nothing to address the root cause of unaffordable tuition: greedy and bloated colleges that raise tuition far more than inflation year after year while sitting on $700 billion in endowments,” stated Elaine Parker, the President of the Job Creators Network Foundation. “Colleges need to be held accountable for their outrageous tuition prices that fund high executive pay, an army of administrators who provide little-to-no value, and the construction of resort-style amenities.”
Analysts out fo the University of Pennsylvania’s Wharton School stated that a permanent loan cancellation announcement could lead students to “reorganize their financing toward additional borrowing.” Despite the fact that the policy could increase access to higher education, it is the schools themselves could end up benefiting the most “in the form of higher prices” as they spike tuition.