Biden's student loan forgiveness plan left these borrowers behind Hundreds of thousands of borrowers spent just over a month thinking they qualified for student loan cancellation. Now they don't.

Borrowers who were cut out of student loan relief describe 'a gut punch'

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This weekend, many borrowers got their first chance to apply for up to $20,000 in student loan relief from the federal government. But after recent Republican legal challenges, borrowers Chris Tasich and Lisa Thackwell realized their loans no longer qualify for relief.

CHRIS TASICH: Emotionally, it's like a gut punch.

LISA THACKWELL: Kind of feels like a punch to the gut.

MARTINEZ: NPR's Cory Turner has their story.

CORY TURNER, BYLINE: Lisa Thackwell says she was looking forward to the $10,000 in student loan relief President Biden promised back in August.

THACKWELL: It would have cut my debt in half.

TURNER: Thackwell and her husband already had plans for that savings.

THACKWELL: Oh, now we can put some of this money towards our boys' education.

TURNER: For borrower Jennifer Newell Davies...

JENNIFER NEWELL DAVIES: I was really counting on having that lower monthly payment to contribute to my mortgage.

TURNER: The problem is they have an old kind of student loan known as a Federal Family Education Loan, or FFEL. These loans were issued by banks and state-based lenders, who also profited from them, but they were guaranteed by the federal government.

DOMINIQUE BAKER: Always keep in mind that FFEL loans are federal loans, period.

TURNER: Dominique Baker is professor of education policy at Southern Methodist University and says in 2010, the Obama administration shut down the FFEL program, but several million borrowers still have these old loans. And Baker says they are precisely the type of borrowers Biden's debt relief plan was meant to help.

BAKER: These borrowers were more likely to attend community colleges, for-profits, HBCUs. And this is fairly old debt.

TURNER: That's why, in August, Biden told them, you, too, can qualify for debt relief. But a few weeks ago, several Republican state attorneys general sued Biden, arguing erasing these old loans would hurt the banks and state-based lenders that still manage them. The day that suit was filed, the Ed Department quietly changed the rules on its website. That's how Chris Tasich realized he and other FFEL borrowers had suddenly been excluded.

TASICH: When I looked at that, my just stomach dropped.

DAVIES: Honestly, I cried a bit when I found out that it might not be forgiven. And that's when I started the petition.

TURNER: Jennifer Newell Davies is gathering signatures from fellow borrowers to make clear this reversal will hurt a lot of people.

DAVIES: You know, Republicans aren't stepping out there to help them, but now it feels like Democrats are turning their backs.

TURNER: Court documents show the White House cut these borrowers out to legally protect debt relief for everyone else. And publicly, it said these FFEL borrowers are a small group - just 2% of the borrowers who could benefit from Biden's plan. When asked about the reversal, White House Press Secretary Karine Jean-Pierre downplayed its impact.


KARINE JEAN-PIERRE: The number of borrowers impacted are much smaller. I know there was a number of millions...


JEAN-PIERRE: ...But it's actually much smaller.

TURNER: How small? Well, it's still enough borrowers to fill Yankee Stadium 14 times - just under 800,000.

TASICH: It makes me so angry. They just continue to say that it's a small group. It's a small group. It's a small group.

TURNER: Again, borrower Chris Tasich.

TASICH: But it's a vulnerable group. They've held debt longer than most, and they've consistently been marginalized.

TURNER: FFEL borrowers also didn't qualify for the pandemic pause in interest and repayment for the same reason they're now being excluded from debt relief - because their loans are a vestige of the past, held by outside lenders but backed by the U.S. government.

Cory Turner, NPR News.


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