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Student debt relief site sparks skepticism amid lawsuits

Posted at 9:32 PM, Oct 17, 2022
and last updated 2022-10-17 21:32:53-04

A major step toward wiping out thousands of dollars of student loan debt for millions hit a stumbling block Monday.

As the Biden administration launched the online application to determine eligibility for loan forgiveness, the site briefly went down under high demand.

"As millions of people fill out the application, we're gonna make sure the system continues to work as smoothly as possible so that we can deliver student loan relief for millions of Americans as quickly and as efficiently as possible," President Joe Biden said. 

Some 90% to 95% of student loan borrowers could be eligible for relief. That's around 39 million Americans encouraged to fill out the application.

"Borrowers who are eligible for this cancellation should actually be applying right now, so that they can get the cancellation before repayment starts in January," said Josh Rovenger, legal aid attorney.

Borrowers who meet the criteria include individuals who made less than $125,000 in 2020 or 2021, and couples who made less than $250,000 in the same tax years. Students who got a Pell Grant can get up to $20,000 in forgiveness, others up to $10,000.

However, borrowers are skeptical they'll ever see the forgiveness as legal challenges enter the courts. 

SEE MORE: Application Site Opens For Biden's Student Debt Cancellation

"Some of that anxiety started to creep back in that it might not be as stable of an idea as we thought it was and just the fear that that really good idea could be overturned," said Olivia Ferguson, University of Wisconsin Milwaukee student.

President Biden acknowledged the legal fight Monday but sounded bullish. 

"Litigation is underway, and I don't think our legal judgment is that it won't, but they're trying to stop it," he said.

Opponents argue the president's move is an executive overreach and that Congress should be the ones to forgive student debt.

Still, others, including Republican Florida Gov. Ron DeSantis say it's simply unfair.

"It's very unfair to people who took other pathways in life that didn't require them to take out a lot of loans," Gov. DeSantis said. "They made those decisions to not have that debt, and now the debt's being put on them."

Legal experts are unsure the legal challenges will stand, which is why critics are challenging the move from several legal angles to test which sticks. 

"The big one though that I think has the most credibility is the student loan services, the ones who are potentially directly harmed by these actions," said Nick Hillman, University of Wisconsin Madison professor. "If they are found to have standing and can proceed, I wouldn't be surprised if this goes all the way up to the Supreme Court and gets stopped before a single penny is canceled."

That keeps borrowers on their toes, as the application opens and the administration forges ahead with debt forgiveness.

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