More than 1.1M in Pa. applied for Biden’s student debt relief | Monday Morning Coffee

The program is now before the U.S. Supreme Court, which could overturn it

By: - January 30, 2023 7:11 am
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With President Joe Biden’s student debt forgiveness program now in the hands of the U.S. Supreme Court, the White House went on offense last week, blasting out state-by-state breakdowns of how many Americans stand to benefit from it.

In all, 26 million people in all 50 states applied — or were automatically eligible — for the onetime relief, the administration said last week. That included 1.15 million Pennsylvanians, 743,000 of whom saw their applications approved and sent to loan servicers, the data showed.

According to the White House, more than 40 million student loan borrowers nationwide would qualify for the one-time relief, with 90 percent of the benefits for out-of-school borrowers going to those earning $75,000 a year or less.

“Millions of those borrowers could be experiencing the benefits of that relief today – were it not for lawsuits brought on by elected officials in some of their own states,” the White House said in a fact-sheet it released last week.

The long-awaited plan, officially announced last year, forgives $20,000 in student debt for Pell Grant recipients and $10,000 for borrowers earning $125,000 or less annually, the Capital-Star reported at the time.

With 64 percent of Pennsylvania college graduates having student loan debt in 2019-20, the commonwealth ranks among the highest in the nation for most debt, according to the Institute for College Access and Success, a national organization that advocates for accessible and affordable education, the Capital-Star’s Marley Parish reported last year.

The average debt load of a Pennsylvania college graduate during the same timeframe was $39,375. In Pennsylvania, 22 percent of college graduates had private student loan debt, with an average total of $42,361, Parish reported.

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Republican opponents immediately went to court to try to stop the debt-forgiveness program, and the U.S. Supreme Court has announced that it will hear oral arguments in two of the challenges at the end of February, CNBC reported.

The high court is set to hear challenges brought by six Republican-led states, who argue that “forgiveness will disrupt state entities that profit from federal student loans, as well as a lawsuit backed by the Job Creators Network Foundation, a conservative advocacy organization, featuring two borrowers in Texas who are partially or fully left out of the president’s relief,” CNBC reported.

It’s possible the nation’s highest court, which has a conservative majority, will strike down the White House’s program, one legal expert told the financial news network.

That’s because the justices swiftly agreed to hear the challenges, suggesting they’re eager to strike it down, Harvard University Law School professor Lawrence Tribe told CNBC.

“It’s basically put the program in deep freeze until it proceeds to most likely dismantle it,” Tribe told CNBC.

U.S. Sen. Bob Casey, D-Pa., outlines the $1.2 trillion bipartisan infrastructure bill signed into law by President Joe Biden, during a press call on Thursday, Nov. 18, 2021. (Screenshot)

In Pennsylvania, Biden’s Democratic allies have defended the program, describing it as a lifeline for state residents struggling to pay off thousands of dollars in debt.

The program will allow borrowers “the freedom to invest in their future, buy a home, or take a risk and start a business,” U.S. Sen. Bob Casey, D-Pa., said last year.

Casey added that lawmakers need to address “skyrocketing” college costs, so future students can get an education “without signing up for a lifetime of debt.”

Before he left office, former Gov. Tom Wolf announced that Pennsylvania borrowers who are eligible for the program won’t face any state taxes on the forgiveness — a position that’s in line with the federal government and other states.

“Student loan debt holds us all back. Individuals, families, and the commonwealth as a whole. President Biden’s Student Debt Relief Plan is a weight lifted off of shoulders and we will not burden Pennsylvanians who benefit from this relief with taxes at the state level,” Wolf said in a statement last October.

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John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.