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Biden administration could start canceling student debt as early as Sunday

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The Biden administration could start paying off the student debt of millions of Americans as early as Sunday. This is possible because some of the legal challenges brought against the radical policy by critics have failed in court.

A group of Wisconsin taxpayers earlier this week asked the U.S. Supreme Court to immediately block Biden’s plan to forgive up to $20,000 in federal student debt for borrowers, but the court rejected the request. request.

Meanwhile, a federal district court in Missouri on Thursday dismissed a lawsuit brought by six Republican-led states, which accused the president of overstepping his authority. Judge Henry E. Autrey of the Federal District Court in St. Louis said the states did not have sufficient standing to sue.

Experts say the main hurdle for those hoping to thwart the president’s action has been finding a plaintiff who can prove he was wronged by the policy.

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“Such an injury is necessary to establish what the courts call ‘standing,'” said Harvard law professor Laurence Tribe. “No individual, company or state is manifestly harmed as private lenders would have been if, for example, their student loans had been cancelled.”

While there are a number of other outstanding legal challenges to the president’s plan, the Biden administration is moving forward with its student debt forgiveness agenda.

“We believe these lawsuits are without merit and we will continue to fight for the American people,” Education Secretary Miguel Cardona told CNN on Friday.

The US Department of Education opened its student loan forgiveness request in a beta test last Friday, and more than 8 million people submitted requests for relief over the weekend. The application was officially launched on Monday, and it has been reported that millions more have applied since.

The president announced in August that most federal student loan borrowers will be eligible for some remission: up to $10,000 if they don’t receive a Pell grant, which is a type of aid available to students from low-income undergraduate, and up to $20,000 if they did.

More than 40 million Americans are in debt for their education, and owe a cumulative amount of $1.7 trillion, a balance that far exceeds outstanding credit card or auto debt.

President Biden announces student debt relief plan

Skyrocketing higher education costs, coupled with stagnant wages, have skyrocketed the amount of student debt that graduates are graduating with. Today, the average balance is over $30,000, up from $12,000 in 1980.

Even before the pandemic, when the U.S. economy was going through one of its healthiest times in history, problems plagued the federal student loan system.

Only about half of borrowers were in repayment in 2019, according to an estimate by higher education expert Mark Kantrowitz.

About 25% – or more than 10 million people – were in default or in default, and the rest had requested temporary relief for troubled borrowers, including deferrals or forbearances.

These grim numbers have led to comparisons to the mortgage crisis of 2008.

Corey Shirey, who is studying to become a pastor in Oklahoma, expected to pay off his student debt for 15 years before the president announced his plan. He said pastors in his state typically start earning around $40,000 a year.

As soon as the app went live, he asked for forgiveness. Since receiving a Pell grant in college — he was raised by a single mother who couldn’t afford to save for college — he will receive $20,000 in forgiveness and find himself in debt. around $5,000.

“It’s so exciting,” said Shirey, 27. “It allows me to breathe.”


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