Friday 30 September 2022 10:57 PM Dems urge Biden to REVERSE u-turn 'dashing hopes' of relief for 4 million ... trends now
Progressive Democrats are reeling over President Joe Biden's decision to change the qualifications for student loan forgiveness not to include some non-federal government debts as the administration faces impending lawsuits over the relief plan.
The White House quietly announced a change in its student debt forgiveness program on Thursday that could exclude up to 4 million borrowers with private loans backed by the government.
The change was so quiet, in fact, that lawmakers weren't even informed of the altering qualifications.
Democratic Representative Yvette Clarke said the change need to be 'revisited' to not 'dash' the hopes of people who thought they were receiving relief and now will not.
The u-turn by the federal government comes after the first legal challenges were filed to the policy. It also follows criticism of the huge cost the plan would levy on taxpayers – even those who would not benefit from the forgiveness.
Critics claim the plan is an illegal use of Biden's executive power.
Senator Elizabeth Warren, one of the main champions of wide-spread student loan forgiveness, suggested she wasn't informed of the change, saying: 'I don't know what you're talking about, so I can't comment on it.'
Other progressives have also revealed that they were also not alerted to the change.
Democratic Representative Madeleine Dean of Pennsylvania said that despite coming from a White House roundtable regarding her state, which included discussing the student loan debt issue, the changes did not come up.
Progressives are urging Joe Biden to 'revisit' the change to student loan relief that could see 4 million Americans' hopes 'dashed' of receiving forgiveness. Many progressive Democrats claim they weren't even informed or aware of the change
Congressional Progressive Caucus Chairwoman Pramila Jayapal released a statement Thursday subtly addressing the change in policy.
'In the face of Republican attacks, we understand the White House is prioritizing processing for loans that are publicly held through the Department of Education, which will cover the majority of borrowers, and we appreciate the administration's transparency in working to ensure that the relief will actually reach the people who need it,' she wrote.
While news broke of the change, Senate Majority Leader Chuck Schumer joined progressive Democratic Representatives Ayanna Pressley of Massachusetts, Ilhan Omar of Minnesota and Mondaire Jones of New York for a press conference touting the rollout of student loan forgiveness.
Rep. Clarke said: 'I think that we need to revisit that because of the expectations of those 4 million people was that they will be eligible, that they will be receiving some relief.'
'And clearly it's a struggle in this economy for students,' she continued. It's been a struggle all along, but to have your hopes dashed in that manner due to a revision, I think it needs to be revisited.'
The Education Department announced Thursday that privately-held loans won't qualify for the relief plan, which the Congressional Budget Office said earlier this week could cost $400 billion over ten years.
The scale back on Perkins and Federal Family Education Loans - which are bank loans backed by federal guarantees - is over concerns the companies could challenge the Biden administration in court, Politico reported.
They used to be a major component of federal student loans, but were stopped in 2010 after a major Obama administration overhaul shifted to direct government loans.
Nevertheless, about four million people still have FFEL loans, according to government data identified in the report. Forty-five million Americans owe student loans.
The Biden administration's latest policy backtrack is likely to affect 770,000 people, an official told CNN.
The administration had initially allowed those with FFEL loans to reorganize so they were eligible to receive the $10,000 to $20,000 of relief per borrower.
The Biden administration quietly announced a change in their student debt forgiveness program that could exclude four million borrowers after the first lawsuits were filed against the plan and following criticism of the huge costs to taxpayers
But as of Thursday, those who hadn't made the changes were no longer able to benefit.
According to the report, the businesses that hold the loans are the greatest legal threat to the program.
They face losses as borrowers consolidate their loans and move them to one owned directly by the government.
The initial policy stated that FFEL and Perkins loans qualified.
The Department of Education guidance updated on Thursday stated: 'As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans.'
The Department is 'assessing' whether 'there are alternative pathways to provide
