A last-minute change by the White House appears to be designed to defuse legal challenges from multiple states
© Getty Images / Bill Clark
The administration of US President Joe Biden has tweaked its much-hyped student loan relief program to exclude about 770,000 borrowers with private loans guaranteed by the federal government, it announced on Thursday.
The move, revealed via email, appears to be designed to defuse legal challenges from multiple states and a libertarian law firm calling into question whether the Biden administration can use public money to wipe out private student loan debt or do so without congressional approval.
Students who obtained their loans through the Federal Family Education Loan Program (FFEL), which ended in 2010, and the Federal Perkins Loan Program, which ended in 2017, will no longer be eligible for loan forgiveness. In both programs, the federal government acted as guarantor to the private lenders who supplied the loans, meaning the private lenders and guaranty agencies involved have standing to sue over the financial injury they could suffer if such loans were forgiven.