What's in the student debt forgiveness approval letters

What’s in the student debt forgiveness approval letters

Over the weekend, federal student loan borrowers who applied for President Joe Biden’s debt forgiveness began receiving updates on their applications. Letters sent to borrowers via email let them know their forgiveness application had been approved and their servicer has also been notified.

The letters state that borrowers have no further action to take, but their debt cannot actually be discharged at this time due to the ongoing lawsuits.

“Unfortunately, a number of lawsuits have been filed challenging the program, which have blocked our ability to discharge your debt at present,” the letters read. “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 letters continue. “We will update you when there are new developments.”

The letters did not indicate how much forgiveness borrowers would be receiving, whether it’s the $10,000 available to individuals making less than $125,000 or $20,000 for Pell Grant recipients. 

It’s unclear whether some applicants received rejection notices or requests for further information. The Department of Education did not immediately respond to CNBC Make It when asked to confirm if any rejection letters went out.

Secretary of Education Miguel Cardona said in a tweet applicants were receiving “updates.” He also said not to worry if you haven’t seen a letter yet, “more are coming.”

The Biden administration also sent a letter to the Supreme Court last week asking the court to allow the program to proceed while the lawsuits play out. 

Specifically, the administration asked the court to overturn the injunction issued by the Eighth Circuit Court of Appeals, which blocked relief from going to borrowers while it considers a multi-state lawsuit.

“The district court dismissed their suit for lack of Article III standing, but the Eighth Circuit granted their request for a universal injunction pending appeal,” the brief states. “In so doing, the court did not analyze the merits of respondents’ claims, much less determine they are likely to succeed.”

The Supreme Court has asked the plaintiffs to respond by Wednesday. The administration is currently barred from accepting more applications for debt forgiveness.

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Check out: Borrowers react to student loan forgiveness: ‘A huge weight has been lifted off of my shoulders’

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