The Biden administration warned in a new court filing of 'an historically large increase' in federal student loan delinquency and defaults without its forgiveness plan.
the wake of numerous legal challenges as the years-long pause on loan repayment is set to expire in December.last week pulled the relief application offline after millions of borrowers had already signed up.
If the program took effect, it would cancel up to $20,000 in student debt for Pell Grant recipients and up to $10,000 for individual borrowers who make under $125,000 per year.What they're saying: " Unless the [Education Department] is allowed to provide debt relief, we anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic," James Kvaal, the department's under secretary, said in the filing.
"This could result in one of the harms that the one-time student loan debt relief program was intended to avoid," Kvaal added. The people most at risk of defaulting are "the approximately 18 million borrowers eligible for one-time debt relief who would have their federal student loans discharged in their entirety under the program," he added.
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