About 26 million Americans have asked for student loan forgiveness

About 26 million Americans have applied for student loan forgiveness, and the Biden administration has already approved 16 million requests, the White House said Thursday.

However, the entire plan to cancel the loan could be in jeopardy because of legal challenges raised by Republicans, he warns.

“If Republican officials have their way, the monthly costs of tens of millions of Americans will skyrocket when student loan payments resume next year,” the administration said in a statement.

“Working and middle-class Americans who could end up with as much as $10,000 or $20,000 in student debt under the Biden administration’s plan will be saddled with loan debt — preventing them from realizing their dreams of owning a home, saving for retirement or starting a small business.” .

Since the White House unveiled its plan in August to eliminate $10,000 for most student loan borrowers and up to $20,000 for those who received grants for low-income families, it has faced at least six lawsuits .

Most recently, a court challenge from six GOP-led states temporarily stopped the administration from beginning to forgive borrowers’ debt. Although their lawsuit was dismissed by a federal judge in Missouri earlier this month, the states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — have appealed.

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Earlier this month, U.S. District Judge Henry Autry in St. Louis ruled that while the states had raised “important and substantial challenges to the debt relief plan,” they ultimately lacked standing to proceed.

Experts say the main hurdle for those hoping to derail the president’s actions has been finding a plaintiff who can prove they were harmed by the policy.

“These kinds of injuries are necessary to establish what courts call ‘standing,'” said Lawrence Tribe, a Harvard law professor. “No individual, business, or state would suffer more than private lenders if, for example, their student loans were canceled.”

The GOP-led states did not give up after their lawsuit was dismissed. They filed an appeal and asked the court to suspend implementation of the presidential plan, which was supposed to begin last month, while it considers their request. The 8th U.S. Circuit Court of Appeals granted the states’ emergency petition, preventing the Biden administration from starting to forgive student debt just yet.

In their challenge, the states accuse President Joe Biden of exceeding his authority. They also say the action will put some private lenders out of business because it will force millions of borrowers who have their federal loans from those companies to consolidate their debt into the main federal student loan program. The U.S. Department of Education said borrowers who have these FFELs, or federal family education loans, can take this step to qualify for the discount.

The Department of Education, in order to protect its broader loan forgiveness policy, has now said that FFEL borrowers must consolidate their loans by the end of September to be eligible. They can no longer do this to qualify.

That would make it harder for GOP states to argue that the president’s plan would cost private lenders a significant amount of business, said higher education expert Mark Kantrowitz.

“The state’s general lawsuit was the strongest of the lawsuits until the U.S. Department of Education pulled the rug out, eliminating their standing,” Kantrowitz said.

The tribe agreed and said the legal status of the other claimants was also shaky.

“They represent a bunch of litigants looking for a theory,” Tribe said. “But at the end of the day, it’s the merits that matter, and there’s little merit in disputing them.”

For now, student loan forgiveness could help the Biden administration and Democrats in the midterm elections, experts say.

“Borrowers may be worried about whether forgiveness will happen,” Kantrowitz said. “It might encourage more of them to vote.”

If Democrats retain control of the House and pick up seats in the Senate, he said, they could pass legislation that would relieve student debt.