About 79,000 Idahoans are in student-loan debt relief limbo

New data released by the White House this week shows that 79,000 people in Idaho were on track to have at least some of their student loan debts washed away under a debt-forgiveness executive order. Another 47,000 had pending applications or would have been automatically eligible for the debt forgiveness program, it said.

Nationwide, 16 million former students were approved for the debt forgiveness program before it was put on hold, and another 10 million who had pending applications.

The federal government had already set in motion debt forgiveness for the approved borrowers, so that up to $10,000 of debt would be forgiven, or up to $20,000 if the borrower had qualified for Pell grants as a student. The program was limited to people earning less than $125,000 a year; the White House says nearly all of the relief would go to people who earn less than $75,000 a year.

“However, in November of last year – less than a month after the application was first released – the (U.S. Department of Education) was required to stop accepting applications as a result of lawsuits brought by opponents of the program,” a press release from the White House said. “Loan servicers were thus prevented from discharging any debt.”

Opponents of the program argue that the executive branch overstepped its authority and that Congress would have to authorize the program. Others argue that the program is unfair to students who did not take out federal student loans to pay for higher education.

The program has been the subject of several lawsuits.

Those who have sued over it include:

• state governments that stand to lose revenues from the interest income that student loans bring in, or who argue it will damage their economies and workforce;
• individuals who don’t qualify for partial or full loan forgiveness;
• an organization that argued the program would cause their taxes to increase;
• and a prominent libertarian nonprofit organization, the Cato Institute, which argued, among other things, that the program undermines an existing debt-forgiveness program for people who work in specific jobs after graduation, including at nonprofits.