As Republican AGs Sue, Biden Admin Quietly Cuts Hundreds of Thousands of Borrowers From Loan Cancellation

On the same day six Republican state attorneys general sued the Biden administration, the Department of Education quietly changed its website to say that at least 800,000 borrowers are ineligible for the student loan forgiveness program. of President Joe Biden.

The department’s website said early Thursday morning that “all loans eligible for the student loan pause,” including Federal Family Education Loans (FFEL) and Perkins loans, are eligible for the forfeiture of the student loan. debt, NPR reported. A few hours later, however, the department surreptitiously changed its site to say that “borrowers with federal student loans not held by [the Education Department] cannot get one-time debt relief.”

While the federal government guaranteed the FFEL program, private banks issued the loans until the program ended in 2010, making the loans ineligible for relief under the rule change.

The change came as six attorneys general sued the Biden administration to stop the scheme, which critics say is unconstitutional and likely to drive up already sky-high inflation. The Congressional Budget Office said Monday the plan would cost about $400 billion, though other reports put the cost at more than $1 trillion. The AG complaint specifically mentions FFEL loans, saying the cancellation will directly harm quasi-government loan manager MOHELA.

An administration official told NPR the change will not affect the four million borrowers with FFEL loans, saying borrowers with both FFEL loans and direct loans may still be eligible. The Ministry of Education site does not say whether a borrower with both types of loans may qualify. FFEL and Perkins Loans borrowers who applied for debt cancellation before Thursday are still eligible, the site says.

The official told NPR the change would affect about 800,000 borrowers.

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