Federal lawsuits hold up student loan relief for more than 500K approved borrowers in Michigan

A late 2020 graduation ceremony for the University of Michigan, May 7, 2022 | Laina G. Stebbins

By Allison R. Donahue, Michigan Advance

About 860,000 Michiganders applied or were automatically eligible to get their student loan debt forgiven last year, according to data from the Biden-Harris administration, but that relief continues to be held up by lawsuits.

In August,  President Joe Biden rolled out his plan to provide up to $20,000 in debt relief for borrowers earning less than $125,000 per year. Recent data from the White House shows that 26 million people from every state applied or were automatically eligible for this one-time student loan forgiveness. 

In Michigan, about 566,000 applications from student loan borrowers were fully approved and their applications were sent to loan servicers for discharge prior to federal lawsuits and an injunction on providing the debt relief. 

A White House spokesperson said that “these borrowers could be benefitting from the Administration’s program right now were it not for lawsuits brought by elected officials and special interests.”

In November, the Department was required to stop accepting applications as a result of lawsuits brought by opponents of the program, and loan servicers were prevented from discharging any debt.

Currently, Biden’s plan to forgive student loan debt is under a nationwide injunction awaiting a U.S. Supreme Court hearing and ruling. The Supreme Court will hear oral arguments on the case Feb. 28.

Nationwide, over 16 million borrowers’ applications were fully approved by the U.S. Department of Education and sent to loan servicers. The department estimates that more than 40 million borrowers would qualify for the Biden administration’s debt relief program.