A federal judge in Michigan has dismissed an attempt by two right-wing think tanks. To prevent the Biden administration from cancelling around 804,000 debtors’ educational debt. Who have been making loan installments for more than two decades.
On Monday, U.S. District Judge Thomas L. Ludington of the Eastern District of Michigan issued an 18-page judgement. The Cato Institute and the Mackinac Centre for Public Policy lacked standing to contest the Biden administration’s move, according to a George W. Bush appointee. This is estimated to automatically discharge nearly $40 billion in federal student loan debt—a small percentage of the $1.6 trillion in outstanding federal student loan debt in the United States.
Victory for Student Debt Relief: Judge Rejects Right-Wing Challenge
In response to the ruling, Mike Pierce, executive director of the Student Borrower Protection Centre, wrote. The case “was the last barrier to debt relief for more than 800,000 people who had been in debt for decades.”
“Predatory companies like Navient took advantage of these borrowers.” And failed due to [the US Department of Education’s] egregious mismanagement,” Pierce continued. “This has been a long-delayed justice.”
Cato and the Mackinac Centre filed the complaint in response to the Biden administration’s recently announced revisions to the income-driven repayment (IDR) programme. Which bases monthly student loan payments on borrowers’ income and qualifies students for debt elimination after about 20 years of qualifying payments.
The programme has long been plagued by problems, failing to provide borrowers with the promised relief. According to a report released last year by the Government Accountability Office (GAO), only a small percentage of qualified borrowers received debt cancellation under the programme.
President Biden Initiates Debt Discharge for Over 800,000 Students
President Joe Biden said on Monday that his administration had began the process. Discharging the debts of 804,000 students who have been in repayment for more than 20 years.
“Because of student loan system errors and administrative failures that began long before I took office.” “More than 804,000 borrowers never received the credit they earned. And they never received the forgiveness they were promised—even after making payments for decades,” Biden added.
Student loan interest will resume on September 1, followed by payments in October. The Consumer Financial Protection Bureau has cautioned that once the halt is lifted, millions of borrowers may struggle to make their payments.
The debt ceiling agreement made by the Biden White House with House Republicans in May effectively ended the student loan payment standstill. Shortly after Biden signed the agreement into law, the right-wing majority of the United States Supreme Court overturned the administration’s proposal. Tens of millions of debtors will have up to $20,000 in federal student loan debt cancelled.