Biden’s student loan relief plan blocked while appeals court considers challenge

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• Judy Woodruff:

  Courts have now handed a pair of victories to President Biden and his plan to erase or reduce the student loan debt of millions of Americans.

  The decisions come as the application process for the debt relief program has opened online.

  John Yang has the latest.

• John Yang:

  Judy, a number of taxpayer groups in Republican-led states have gone to court to try to block the debt forgiveness program, but so far, at least, without success.

  Today, at the historically Black Delaware State University, President Biden hit back at Republican critics of the plan.

  Joe Biden, President of the United States: Let's talk about who's against helping the millions of you who need the help, who want to make sure you have a shot.

  Republican members of Congress and Republican governors are doing everything they can to deny this relief, even in their — to their own constituents. As soon as I announced my administration's plan on student debt, they started attacking it, saying all kinds of things. Their outrage is wrong, and it's hypocritical.

• John Yang:

  Forty-five million Americans carry federal student loan debt, but not all are eligible for relief.

  Danielle Douglas-Gabriel covers the economics of higher education for The Washington Post. And she joins us now.

  Danielle, thanks so much for joining us.

  So who is eligible for this program?

• Danielle Douglas-Gabriel, The Washington Post:

  So, anyone with undergraduate loans, graduate loans and Parent PLUS loans that are held by the Education Department, as long as they are individually making less than $125,000 a year or, if they're a married couple, $250,000. Under $250,000 a year, they'd be eligible.

  There are some borrowers who technically have federal loans, as in they're backed by the federal government, yet they're not eligible because their loans are still held by private lenders. Until recently, those folks could consolidate their loans into a direct loan program to make themselves eligible for this relief program.

  However, around September 29, the Department of Education said those people would no longer be able to participate in the program.

• John Yang:

  I want to talk more about that in a little bit.

  But for folks who are eligible, is there a timeline? Is there a time they have to apply by? Do some of them get this automatically? And what sort of things do you need to apply?

• Danielle Douglas-Gabriel:

  Certainly.

  So, you need to apply before the end of 2023. So, December 31, 2023, is the cutoff date. Already, we have seen about 12 million people apply since the Department of Education opened the application last Friday through a beta test and then officially launched this Monday.

  As far as the people who can automatically see relief, there are about eight million people for whom the Department of Education has their income information on file. These are people who recently filled out the federal financial aid form or who are in this repayment program that's tied to their income.

  Those people are being notified right now. Many probably already have received the e-mail from the department saying, hey, you are eligible for automatic relief. That means you don't need to apply. However, if you would like to receive the relief earlier than the people who are in the kind of auto camp will receive theirs, feel free to submit an application.

  Now, the department is certainly collecting applications, but it's a little uncertain where that when they will start discharging the debt.

• John Yang:

  And you talked about the loan consolidation, people who have federally-backed loans who were cut out of this.

  How many of those — how many people are there like this? And, also, one of the — a federal judge in Missouri who dismissed a challenge to this program from six Republican-led states talked about that provision as one of the reasons why he threw the case out. Can you explain that to us?

• Danielle Douglas-Gabriel:

  Certainly.

  So, there are roughly about 700 and, I think, 70,000 people who fall into this category of having federally backed loans that are held by private lenders or state agencies. Now, a couple of state agencies, including one in Missouri and Arkansas, were kind of at the center of this lawsuit that you mentioned.

  They didn't themselves file a lawsuit trying to block this program, but their state A.G.s did. And in that instance, they said that the state would be robbed of revenue if the department's program were allowed to continue, because it would entice people to consolidate their loans.

  However, the department, in making the decision to cut out a lot of people who could consolidate from this program, kind of undermined that argument. At least, that's what the judge said in yesterday's ruling.

  Now, they did — he dismissed that case because none of the people who brought it, in his estimation, had the standing to do so, meaning they couldn't really prove any actual harm. Now, the case is certainly being appealed right now. It's heading to the Eighth Circuit. So we're really waiting to see what the panel of three judges decide.

• John Yang:

  Standing was also an issue in a case brought by a taxpayer group from Wisconsin. The district court and the appeals court all agreed that the group did not have standing. Supreme Court Justice Amy Coney Barrett upheld those rulings.

  Are there other challenges in the pipeline that could threaten this program?

• Danielle Douglas-Gabriel:

  Oh, certainly. They keep coming.

  I think we now have seven lawsuits, active lawsuits, that are in some stage. A number of them have been dismissed for standing. But people are appealing those decisions and still trying to fight for relief.

  I think the next one we would be wise to watch, especially if you are a borrower eligible for this release, is a case coming out of Texas filed by two borrowers, one who has one of those privately held federally backed loans that we talked about who is claiming that they're not going to be able to take advantage of the program. So they're suing.

  And the other borrower involved in that case is not eligible for the full $20,000 of relief that's provided to people who had federal Pell Grants in undergrad. That's a particular type of grant for low-income students. And these two borrowers are saying that it is an arbitrary kind of guidelines that the Education Department is using in order to decide who is eligible and who's not.

  And, as a result, they're suing, amid other reasons, such as the president doesn't have the authority to do that, which is really at the heart of pretty much all of these lawsuits, challenging whether the — that the president can have the authority to do this without congressional action, hearkening back to what we saw with the EPA case that came before the Supreme Court.

  So I think a lot of people are really interested to see whether any of these cases get pass the issue of standing. And if judges actually do look at the merits of their arguments, will they say that, yes, the president's authority that he's using does hold up or that, no, Congress needs to be involved in a decision of this magnitude.

• John Yang:

  Danielle Douglas-Gabriel of The Washington Post, thank you very much.

• Danielle Douglas-Gabriel:

  Thanks for having me.