Feb 6, 2023 - News

Student loan relief for 308,000 Washingtonians on hold

Illustration of a large pile of money with a graduation cap on top.

Illustration: Aïda Amer/Axios

Hundreds of thousands of Washingtonians have already been approved for up to $20,000 in student loan relief — but their debt remains on the books due to ongoing legal challenges.

Why it matters: Those borrowers are in limbo right now as they wait to hear whether or not their debt will be forgiven.

By the numbers: About 308,000 Washington residents were approved for President Biden's student loan relief program in the short time the application was available last year, the White House announced Jan. 27.

  • All told, about 486,000 people in Washington applied or had already submitted enough information to be considered eligible for the program, before court rulings blocked it from taking effect in the fall.
  • To qualify for relief, people had to earn less than $125,000 per year ($250,000 for married couples).

State of play: The loan forgiveness program remains on hold while the Supreme Court considers a legal challenge brought by a coalition of GOP-led states, Axios' Shawna Chen writes.

What they're saying: Stephanie Sampedro, Washington state's student loan advocate, told Axios that some borrowers are "really crestfallen" about the delay — particularly people whose debt would be entirely wiped out by the federal program.

  • "Getting the news was really exciting for a lot of folks," Sampedro said, referring to when the Biden administration announced the program last August. "Having it taken away left a lot of people feeling really discouraged."

The other side: The six states suing argue that the Department of Education doesn't have the authority to cancel people's debt.

  • The Texas case centers on whether the White House followed proper administrative procedures.

What's next: Biden is pushing to overturn the earlier rulings, which would allow loan servicers to start discharging people's debt.

  • For those who have already applied, the Department of Education is holding onto those applications for now, while providing updates on its website.
  • The federal government has extended the pause on loan repayments while it waits for the Supreme Court's ruling, which is expected this summer.

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