President Joe Biden on Monday officially kicked off the application process for his student debt cancellation program and announced that 8 million borrowers had already applied for loan relief during the federal government’s soft launch period over the weekend.
He encouraged the tens of millions eligible for potential relief to visit studentaid.gov and touted the application form that the president said would take less than five minutes to complete. An early, “beta launch” version of the online form released late Friday handled the early stream of applications “without a glitch or any difficulty,” Biden said.
It means that, starting this week, more than 8 million Americans will be receiving assistance that will change their lives, said Biden, who was joined by Miguel Cardona, the secretary of education, on Monday. For the millions of Americans who are struggling with student loan debt, the president dubbed his proposal a "game-changer."
More than one-fourth of the total number of applicants the administration had anticipated would submit applications have already applied during the testing period, demonstrating the popularity of the programme and the enthusiasm of applicants to get the debt relief. Without having to apply, the debt of about 8 million debtors would be forgiven who have income information already on file with the Education Department.
According to Biden's proposal, anyone making less than $125,000 annually or a household with an annual income under $250,000 will have their federal student debt forgiven by $10,000. A further $10,000 is available to those who got federal Pell Grants to pay for their college education. The idea qualifies 20 million people to have all of their federal student debt forgiven.
As a presidential candidate, Biden pledged to push for widespread student loan forgiveness, but the matter was debated internally for more than a year due to concerns over its legality. Prior to the midterm elections, his idea prompted a heated controversy, with Republicans and some Democrats accusing it of being an unfair handout to college grads.
However, Biden vehemently defended his choice on Monday.
Biden stated, "My vow was that, if elected president, I would make government work to deliver for the people. "This launch upholds that promise."
He also targeted Republican politicians who have either denounced the proposal or are attempting to have it overturned in court.
Biden stated, "Their fury is misplaced and it's hypocritical." "I will never apologise for assisting middle-class and working-class Americans in their recovery from the pandemic.
On Monday, Biden said that more than 10,000 remarks and calls of gratitude from borrowers had been received by the White House. Thousands of people did share the form on social media, and many of them reported that they had minimal issue submitting their applications.
It has been hailed by the Biden administration as a "simple, uncomplicated" application. The borrower's name, Social Security number, contact details, and birthdate are requested. Users are asked to select a box to confirm that they are qualified for the programme based on the income limits, but no financial information is required.
In order to help identify candidates who are likely to exceed the income limitations, that information would be compared to Education Department records, according to the administration. These folks will be questioned further to demonstrate their incomes.
In a recent report to the White House's Office of Management and Budget, the Education Department stated that between 1 million and 5 million persons will have to produce that additional evidence.
The estimated cost of developing and processing the form, close to $100 million, infuriated activists who saw the application as an unnecessary roadblock. While advocates claim it could discourage some lower-income Americans who need the relief, the form is intended to help exclude the roughly 5% of borrowers who exceed the income limitations.
Borrowers could anticipate receiving their debt forgiveness in four to six weeks once the Education Department starts processing applications, according to authorities. Before mid-November, the majority of applications will be processed by Jan. 1, the day that federal student loan payments would start after being suspended during the pandemic.
Applications may be submitted by borrowers up until the end of 2023.
Even as it battles an increasing number of court challenges, the Biden administration is moving forward with the debt forgiveness. The idea is being challenged in court by six Republican-led states because they believe it exceeds Biden's power and will result in losses for the companies hired to manage federal student loans and collect interest.
The states are currently debating their request for an injunction to stop the plan with a federal judge in St. Louis. The Education Department has stated in court documents that no debt cancellation will be completed before October 23.
Although Biden noted on Monday that legal proceedings are still ongoing, he said that his administration is confident that the programme will ultimately be unaffected.
