Twenty-six million borrowers either applied for the Biden administration’s student loan debt cancellation plan or had already provided sufficient information to the Education Department to be deemed eligible in the four-week span that the application was available, according to data released by the White House on Friday.
More than 16 million of the applications were fully approved by the department and sent to loan servicers before a handful of lawsuits filed by opponents of the program prevented the debt from being discharged and forced the department to stop accepting applications.
The White House estimates that as many as 40 million borrowers would qualify for the relief, with nearly 90% of the benefits of going to out-of-school borrowers earning less than $75,000 per year.
But whether borrowers will ever see even a dime of their debt canceled is now up to the Supreme Court, which is set to hear oral arguments on Feb. 28.
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President Joe Biden in August announced the plan to cancel up to $20,000 in student loan debt for borrowers earning less than $125,000 a year, drawing swift criticism from Republicans – and even some private grumbling among moderate Democrats – who argued that launching the program through executive authority was a violation of federal law and skirted the congressional authority needed to implement any type of debt cancellation plan.
Now, with the House controlled by Republicans, opposing the program has become a key priority. Increased pressure also comes as outside auditors raised red flags over how the Education Department estimated the $380 billion price tag of Biden’s student debt relief, arguing the economic assumptions for how many borrowers would qualify were not precise enough.
“The department is blatantly lying about how much taxpayer money it is giving away,” said Rep. Virginia Foxx, North Carolina Republican and new chairwoman of the Education and Workforce Committee. “This is absolutely ridiculous.”
The new federal data about borrowers who applied for the debt cancellation includes a state-by-state breakdown of how many people applied and whose applications were approved by the Education Department before loan servicers were blocked from discharging the debt, with more than 1 million borrowers from California, Florida and Texas qualifying.
“Millions of those borrowers could be experiencing the benefits of that relief today – were it not for lawsuits brought on by elected officials in some of their own states,” White House officials said in a statement.
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