The Black American Guide To Student Loan Forgiveness: Website Launches, Praised For Efficiency

The Black American Guide To Student Loan Forgiveness: Website Launches, Praised For Efficiency


Photo by Pavel Danilyuk, Pexels

Many were excited when President Joe Biden announced his student loan forgiveness plan. The government recently debuted the application website where people can see if they would be eligible to have their student loan debt canceled in total or in part. Since mid-October, 22 million Americans have applied for forgiveness. And many praised the site for its efficiency. But now, it’s been blocked by a lawsuit bought by several Republican politicians.

The Biden administration will forgive up to $10,000 in federal loan debt and up to $20,000 each for the 27 million American borrowers who have received Pell Grants. The Pell Grant program is specifically for low-income borrowers and is a subsidy the U.S. federal government provides for students who need it to pay for college.

According to Forbes, nearly 60 percent of Black college students and nearly half of Native American and Latino students receive Pell Grants.

Historically Black Colleges and University students will also find relief as many of them take out Pell Grants and federal loans to attend college.

Black and African American college graduates owe an average of $25,000 more in student loan debt than white college graduates, according to research group Education Data Initiative. Four years after graduation, 48 percent of Black students owe an average of 12.5 percent more than they borrowed.

But for now, students will have to wait to see if their loans will be forgiven. Biden’s student loan forgiveness plan is on hold. A court has temporarily blocked it from going forward.

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In August, when Biden said he’d be forgiving up to $20,000 for millions of borrowers Republicans issued challenges to the policy. On Oct. 21, a U.S. appeals court temporarily blocked it from moving forward.

In September, attorneys general from the Republican-led states of Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina sued the Biden administration in an effort to stop its plan to cancel hundreds of billions of dollars in student debt, CNBC reported.

Earlier this month a court ruled that while the suing states had raised “important and significant challenges to the debt relief plan,” they ultimately lacked legal standing to pursue the case. The GOP-led states, who are accusing the president of overstepping his authority, filed an appeal, and asked the court to stay the president’s plan. This is where the program is currently at.

The 8th U.S. Circuit Court of Appeals granted the states’ emergency petition, leaving the Biden administration unable to continue forgiving any student debt.

The GOP-led states also argue that the action would cause some private lenders to lose business due to the debts being forgiven.

Biden’s plan will also help students who took out student loans and were defrauded by shady for-profit schools. This is what Kyle Sudhoff told Fortune happened to him. The DeVry University graduate was promised that DeVry would, after graduation, place in him a job placement with a high starting salary.

Sudhoff graduated in 2011 with a degree in technical management, but there was a high-paying job waiting for him, as DeVry promised. And he had a student loan debt of $35,000. Ultimately, he took a job as an operations coordinator at a manufacturing company that paid just $15 an hour.

More than one-quarter(28 percent) of African Americans enrolled in a four-year institution attend a for-profit college, compared with just 10 percent of whites, according to the Center for Responsible Lending.

When the U.S. The Department of Education has found DeVry “repeatedly misled prospective students across the country,” Sudhoff filled out the application to have his debt discharged. Nothing happened until February 2022, when he received an email saying his loans would be discharged. All of his debt balance of around $22,000 is gone, and Sudhoff will receive a refund for the $13,000 he’s paid on his loans since graduation.

Defrauded borrowers can receive relief through the Borrower Defense to Repayment (BDTR) under Biden’s overall student debt program. Defrauded borrowers can fill out an application on the Federal Student Aid website to have their federal student loans eliminated. This site is still up and operating.

BDTR actually isn’t new, but it was put on ice under President Donald Trump’s administration. Now, the Biden Administration has restarted it and has begun investigating predatory schools and forgiving loan debt for borrowers without requiring an application process. So far, that includes group discharges for people who attended Westwood College, ITT Technical Institute, Corinthian College, and Marinello Schools of Beauty, among others.

As of the end of August, the BDTR program has discharged about $14.5 billion, Fortune reported.