DOE scales back student loan forgiveness eligibility as Biden gets sued over plan

The Biden administration has rolled back eligibility for its student loan forgiveness plan on the same day six Republican states filed a lawsuit to prevent the plan from being implemented, per CNN.

Initially, borrowers with student loans held by private lenders qualified for forgiveness if they consolidated their loans into the federal Direct Loans program. Borrowers took on many such private loans under the former Federal Family Education Loan (FFEL) and the Federal Perkins Loan programs.

The Department of Education updated its website Thursday to reflect its recent adjustment. The eligibility requirements now state that any borrower who had not completed consolidation before Sept. 29 will be excluded from the plan. Administration officials estimated this will make around 770,000 ineligible for student debt relief.

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Those who have not yet consolidated their privately held federal student loans are in limbo. Still, the Department of Education said it "is assessing whether there are alternative pathways" to provide debt relief for excluded borrowers.

On Thursday, a group of attorneys representing Missouri, Arkansas, Kansas, Nebraska, South Carolina, and Iowa filed a lawsuit against Biden in a Missouri federal court to challenge the legality of the White House's student debt relief plan.

The office of Nebraska Attorney General Doug Peterson released a statement arguing that "in addition to being economically unwise and inherently unfair, the Biden Administration's Mass Debt Cancellation is another example in a long line of unlawful regulatory actions. No statute permits President Biden to unilaterally relieve millions of individuals from their obligation to pay loans they voluntarily assumed."