The Department of Education sent out emails over the weekend notifying some borrowers their student loan forgiveness applications were approved, despite several pending legal challenges.
The emails stated, “We reviewed your application and determined that you are eligible for loan relief under the Plan. We have sent this approval on to your loan servicer.”
It went on to say, “Unfortunately, a number of lawsuits have been filed challenging the program, which have blocked our ability to discharge your debt at present. We believe strongly that the lawsuits are meritless, and the Department of Justice has appealed on our behalf. Your application is complete and approved, and we will discharge your approved debt if and when we prevail in court.”
The email also told borrowers they did not need to take any further action.
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Currently, President Joe Biden’s debt relief program has been halted after several lawsuits challenged the program.
“That could take a little bit of time, and unfortunately that could leave borrowers in limbo in knowing if they are going to receive the forgiveness, how much forgiveness, and the planning process in the new year financially,” Attorney Leslie Tayne said.
Financial Attorney and Student Loan Debt Expert Leslie Tayne says there is no way to estimate how long these issues could take to resolve.
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“Ultimately it will be up to the Supreme Court to make that decision, they could ask for oral arguments, they could ask for written arguments, there are a number of options, so it is in limbo, and that is frustrating for borrowers,” Tayne said.
Borrowers should keep in mind, the pause on Federal Student Loan payments is still scheduled stop at the end of the year. Tayne says borrowers should prepare to start repaying the debt they owe, including debt eligible under Biden’s forgiveness program.
“Plan for it, and if it ends up getting extended and you benefit from that at least you are prepared,” Tayne said.
For now, many borrowers we spoke with say they are patiently waiting for the forgiveness.
“Our current economic situation, I do think it is something they will push through,” one borrower told us.
If you didn’t receive a letter, don’t worry. The Secretary of Education says more are being sent out.
For now, the Department of Education is not accepting new applications for relief until the lawsuits are resolved.
