Student Loan Debt Forgiveness Portal Launches Beta, Taking Applications

Student Loan Debt Forgiveness Portal Launches Beta, Taking Applications (Newsmax)

By Eric Mack | Saturday, 15 October 2022 11:15 AM EDT

Despite legal challenges to the Biden administration's student loan debt forgiveness plan, the administration has begun a beta testing period and is taking applications to cancel up to $20,000 in student loan debt.

The website released a "beta launch" Friday night.

"We're accepting applications to help us refine our processes ahead of the official form launch," the website disclaimer read. "If you submit an application, it will be processed, and you won't need to resubmit."

The official unveiling is later this month, after President Joe Biden announced a plan to cancel up to $20,000 in federal student loan debt.

Once processing officially begins, borrowers who qualify will begin receiving debt relief within weeks, CNN reported.

The program is tailored to forgiving federal student loan debt once the COVID-19 pandemic freeze on repayments expires in January, according to the report.

The Job Creators Network Foundation filed a lawsuit Monday seeking to block the program, which joins similar lawsuits from Republican states.

Elaine Parker, president of Job Creators Network Foundation, slammed the program as executive overreach and complained that it does nothing to address the root cause of rising debt: the "outrageous increase in college tuition that outpaces inflation every single year.”

"This bailout is going to affect everyone in this country because of the mass size of the program," she said. "And everyone should have the opportunity to provide their views to the government."

"These universities need to be held accountable for this student debt crisis."

Six Republican-led states filed suit late last month, accusing the Biden administration of overstepping its executive powers, as did the Pacific Legal Foundation, a Sacramento, California, legal advocacy group. Their lawsuit, filed in federal court in Indiana, calls the plan an illegal overreach that would increase state tax burdens for some Americans who get their debt forgiven.

The latest lawsuit, filed in U.S. District Court for the Northern District of Texas against the U.S. Education Department and its secretary, Miguel Cardona, takes issue with how the plan was developed. It alleges the Biden administration violated the Administrative Procedure Act's notice-and-comment procedures. It also challenges the administration's legal justification for the program.

The suit includes two plaintiffs: one who does not qualify for debt forgiveness because the plan excludes commercially held loans that are not in default, and one who did not receive a Pell grant and is therefore entitled to less debt forgiveness under the plan.

"Behind closed doors, the department promulgated a new Debt Forgiveness Program that will affect tens of millions of Americans and cost hundreds of billions of dollars," the lawsuit reads. "Instead of providing notice and seeking comment from the public, the Department hammered out the critical details of the Program in secret and with an eye toward securing debt forgiveness in time for the November election."

It also alleges the department "made numerous arbitrary decisions about the Program, including which individuals will receive debt forgiveness, how much of their debt will be forgiven, and which types of debt will qualify for the Program."

"The result of this arbitrariness is predictable: some will benefit handsomely, some will be shortchanged, and others will be left out entirely," it reads.

The case was assigned to U.S. District Judge Reed O'Connor, who most notably ruled in 2018 that the Affordable Care Act was unconstitutional. The Supreme Court reversed that decision last year. O'Connor, an appointee of former President George W. Bush, also has ruled against other policies pursued by Democrat administrations. Last month, he ruled that an ACA provision that required coverage of an HIV prevention drug violates a Texas employer's religious beliefs.

Civil lawsuits filed in the federal court in Fort Worth have a 90% chance of going either to O'Connor or Judge Mark Pittman, an appointee of former President Donald Trump, according to a 2020 order of the court.

The Biden debt forgiveness program will cancel $10,000 in student loan debt for individuals making less than $125,000 a year or households making less than $250,000. Pell grant recipients, who typically demonstrate more financial need, will be eligible for an additional $10,000.

The Congressional Budget Office estimates the program will cost taxpayers $400 billion over the next three decades.

Information from The Associated Press was used in this report.

Original Article