On Thursday, September 29th, 2022, news broke that the Biden administration had reversed course on student loan forgiveness in regards to the FFELP (Federal Family Education Loan Program) loans that are privately held but guaranteed by the federal government.

Link to the NPR article

Loan servicing companies such as Navient told borrowers to await guidance on consolidating the loans to make them eligible for student loan forgiveness under Biden's plan to forgive $10,000 ($20,000 for Pell recipients) in federal loans per borrower.

The deadline of today was given – today. Too late for those of us who had eagerly checked with our servicers for more guidance. 

Additionally: Per the linked NPR story, the most likely reason for this turn from the Biden administration is concern that loan servicers and financial institutions managing FFELP loans might bring suit against the administration, since they would be deprived of a long-term financial asset. While this is true, deprivation of a financial asset is a form of economic damage. In order to stop a law from taking effect, a plaintiff has to show that they will suffer irreparable harm. However, loss of money or profits is by definition reparable—the banks could sue, prove how much they lost out on, and get a judgement for that amount. This means that those banks could be paid off, and should not be able to block the program from taking effect even if they bring suit to challenge it.

Biden’s loan forgiveness plan was already a compromise from the far more ambitious plans put forward by Senators Elizabeth Warren and Bernie Sanders. This new compromise does not serve to protect the program. It serves to protect the Biden administration from a very foreseeable cost of its plan. (Thanks to Santiago P. for this information!)

Sign this petition and ask our representatives and the Biden Administration to fight harder for us, not the loan servicers. Had we not been given guidance to wait, that would be one thing – but we were intentionally told to hold back on action, and now many of us will not be forgiven of these loans.

Note that the FFELP program was discontinued in June 2010. That means we who have been paying these have been paying them for likely more than a decade. We've been holding these loans for a long time and these loans have no doubt created profit for lenders, including the government. 

NPR states that over 4 million borrowers will be affected. (Updated: the government argues that just under 800,000 borrowers will be affected.) We are not a small percentage; 4 million borrowers make up around 9% of federal student loan borrowers. 

Please address this urgent matter now!