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Conservative groups sue to block Biden plan canceling $39 billion in student loans
Two conservative groups are asking a federal court to block the Biden administration’s plan to cancel $39 billion in student loans for more than 800,000 borrowers.
In a lawsuit filed Friday in Michigan, the groups argue that the administration overstepped its power when it announced the forgiveness in July, just weeks after the Supreme Court struck down a broader cancellation plan pushed by President Joe Biden.
It asks a judge to rule the cancellation illegal and stop the Education Department from carrying it out while the case is decided. The suit was filed by the New Civil Liberties Alliance on behalf of the Mackinac Center for Public Policy and the Cato Institute.
The Education Department called the suit “a desperate attempt from right wing special interests to keep hundreds of thousands of borrowers in debt.”
“We are not going to back down or give an inch when it comes to defending working families,” the department said in a statement.
It’s part of a wave of legal challenges Republicans have leveled at the Biden administration’s efforts to reduce or eliminate student debt for millions of Americans. Biden has said he will pursue a different cancellation plan after the Supreme Court decision, and his administration is separately unrolling a more generous repayment plan that opponents call a “backdoor attempt” at cancellation.
The Biden administration announced July 14 that it would soon forgive loans for 804,000 borrowers enrolled in income-driven repayment plans. The plans have long offered cancellation after borrowers make 20 or 25 years of payments, but “past administrative failures” resulted in inaccurate payments counts that set borrowers back on their progress toward forgiveness, the department said.
The new action was announced as a “one-time adjustment” that would count certain periods of past nonpayment as if borrowers had been making payments during that time. It moved 804,000 borrowers across the 20- or 25-year mark needed for cancellation, and it moved millions of others closer to that threshold.
It’s meant to address a practice known as forbearance steering, in which student loan servicers hired by the government wrongly pushed borrowers to go into forbearance — a temporary pause on payments because of hardship — even if they would have been better served by enrolling in one of the income-driven repayment plans.
Under the one-time fix, past periods in forbearance were also counted as progress toward Public Service Loan Forgiveness, a program that offers cancellation after 10 years of payments while working in a government or nonprofit job.
Biden’s action was illegal, the lawsuit says, because it wasn’t authorized by Congress and didn’t go through a federal rulemaking process that invites public feedback.
“No authority allows the Department to count non-payments as payments,” the lawsuit says. It adds that the action came in “a press release that neither identified the policy’s legal authority nor considered its exorbitant price tag.”
The conservative groups say Biden’s plan undercuts Public Service Loan Forgiveness. The Mackinac Center and Cato Institute say they employ borrowers who are working toward student loan cancellation through the program. They say Biden’s action illegally accelerates progress toward relief, diminishing the benefit for nonprofit employers.
“This unlawful reduction in the PSLF service requirement injures public service employers that rely on PSLF to recruit and retain college-educated employees,” the suit alleges.
The Cato Institute previously sued the administration over the cancellation plan that was struck down by the Supreme Court. The Mackinac Center is separately challenging Biden’s pause on student loan payments, which is scheduled to end this fall with payments resuming Oct. 1.
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The Associated Press education team receives support from the Carnegie Corporation of New York. The AP is solely responsible for all content.
Borrowers take to TikTok to weigh options after Biden’s student loan forgiveness was blocked
Student borrowers are floating a range of ideas online for lightening their burdens when loan repayments resume on Oct. 1: Pay a little, pay nothing, cite Scripture.
In a recent viral TikTok with over 50,000 likes, Dawn Cowle discusses a letter she sent to Nelnet, her student loan issuer, featuring a verse from the Book of Deuteronomy: “At the end of every seven years you must cancel debts.”
Cowle acknowledged she was joking — mostly.
“It would be ridiculous if Nelnet was like, ‘Oh, OK, sure, no questions asked. You can’t pay your loans back? You got it!’” she said.
But like many indebted borrowers, she’s had frustrations to vent since June 30, when the Supreme Court invalidated President Joe Biden’s plan to cancel up to $20,000 in student debt per eligible borrower.
Throwing the Bible at Nelnet, Cowle said, “would show that we are not in a position to just continue to lay down and be steamrolled.” (Nelnet didn’t respond to a request for comment.)
Sentiments like Cowle’s have reanimated a vocal online community of borrowers and activists, some of whom have long campaigned for government debt relief or, failing that, a mass boycott of student loan repayments. But experts — and some borrowers who’ve tried it — warn that most people risk serious consequences for not ponying up.
“The financial repercussions of not paying your student loans, to me, is probably one of the worst financial decisions that you can make as an individual,” said Robert Farrington, the founder of the College Investor, which works to improve young people’s financial literacy.
Nonpayment, especially for those with loans from the federal government, could lead the authorities to garnish borrowers’ tax refunds, or their Social Security or disability payments, he said. It can also limit access to more student aid in the future and even hinder employment.
Not paying your student loans, to me, is probably one of the worst financial decisions that you can make.
Robert Farrington, founder of the College Investor
“It’s not new,” Farrington said about the idea of deliberate nonpayment, “but I think because now payments are resuming, it’s definitely getting a lot more traction.”
Over 45 million Americans hold more than $1.7 trillion in federal student loans, with the average borrower owing over $37,000, according to the Education Data Initiative. Most student debt is federal, with only 8% of students borrowing from private issuers.
Shahem Mclaurin, a TikTok creator with over half a million followers, asked viewers in a recent viral video whether people will begin paying back their loans after the Supreme Court rejected Biden’s plan.
“And this is not a joking, play-play-like type of situation,” Mclaurin said. “Are we not paying — like collectively, as a whole — meaning if you put a payment down you are breaking, you’re crossing the line?”
Thousands of comments and “stitches,” where TikTok users incorporate existing posts into their own, weighed in on Mclaurin’s idea. The first-generation college graduate earned a master’s degree from NYU in 2020, owes $150,000 and doesn’t plan on paying any of it back soon, citing the high costs of living.
“I worry every day,” Mclaurin said of the possible repercussions. “Sometimes I don’t sleep at night. I have a lot of anxiety around it.”
After the Supreme Court ruling, the Biden administration unveiled a yearlong grace period starting this fall, insulating borrowers from near-term consequences for nonpayment even while interest begins to accrue again starting Sept. 1. And under longstanding federal policies, borrowers with existing student debt can typically get their payments paused temporarily if they go back to school. In many cases, though, interest will continue to accrue.
Cowle said her loans are deferred for now as she works on her MFA in screenwriting; payments will kick in six months after she graduates a couple of years from now. While she said she didn’t pursue another degree as a deferment strategy, some are saying they will.
Dominic McDonald, a May 2022 graduate of Albion College in Michigan, said the ruling expedited his decision to apply for graduate school this year to avoid paying his loans. “I am under some financial stress because I’ve never had to do it before,” he said.
There are ways to pay less through other avenues that don’t entail potential penalties, Farrington said. He estimates that half of student loan borrowers qualify for some type of forgiveness program, but many haven’t filed the paperwork to receive it.
“People are just leaving loan forgiveness money on the table that they should qualify for,” he said.
The Debt Collective, an organization founded in 2012 alongside the Occupy Wall Street movement, has been promoting a “Can’t Pay! Won’t Pay! Student Debt Strike” on its website and offering advice about “the multiple ways you can safely get to nonpayment.”
Those include income-driven repayment plans, which adjust monthly payments to a borrower’s income, and public service loan forgiveness, which allows people working in government and other civic-oriented jobs to have their debts zeroed out. Farrington also encourages these methods, among others, and hopes more people will pursue them.
Even if [the monthly payment] is a couple hundred dollars, I need it.
student borrower Josie Bridges
After the Supreme Court ruling, “We internally are like, ‘Oh wow, we need to prepare for this influx of people,’” said Braxton Brewington, the Debt Collective’s press secretary. He said the group has seen interest in its debt strike jump in recent weeks and expects it to rise further as Oct. 1 nears.
Asked whether the collective worries its messaging could be misinterpreted as a call to simply boycott repayments indefinitely, Brewington said the organization encourages people to avoid defaulting on their loans if they can help it. But he said the group aims to highlight the tough financial predicament many borrowers face.
“What’s blanketed the whole conversation about ‘Should people just not pay?’ is people don’t want to be subjected to the harsh consequences of the federal government,” he said, adding that the Debt Collective urges borrowers to use their money on necessities like food, medication or housing over paying back their loans. “In a lot of ways, there isn’t a choice,” he said.
Some borrowers are warning others online against nonpayment, with a few saying they’d had their wages garnished. Other efforts are popping up to offer cash-strapped debt-holders informal or crowdsourced support through community funds and mutual aid. One TikTok user has even floated creating a lottery system to help pay off random people’s student loans every week.
Josie Bridges, a single mother in Portland, Oregon, said she was eligible to have all of her student loans forgiven under the White House plan. Now, between rent and other basic expenses, she said she couldn’t afford to resume payments this fall even if she wanted to.
“Even if [the monthly payment] is a couple hundred dollars, I need it,” she said.
Bridges is watching the calendar tick down to October with trepidation. She’s even considering picking up a couple new classes — and racking up more debt in the process — just to defer the coming payments.
“Now that they’re back, I’m stressed out,” she said.
How to find the right student loan cosigner
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As the cost of higher education rises, growing at an annual rate of about 2% over the last decade, many students are finding themselves in need of financial assistance to pay for their college classes. The average yearly cost of tuition, books, supplies and daily living expenses is $36,463 per student, according to the Education Data Initiative, though some colleges and universities can have much higher costs than the average.
So, with the start of the fall 2023 semester closing in, you may be searching for ways to cover these costs. While federal grants and loans may cover some of the costs of higher education, they may not be enough to cover everything. In that case, private student loans offered by private lenders can be a good option to fill in the gaps.
However, if you have bad or no credit history and a limited income, securing a private student loan can be challenging. Private student loan lenders take into account your credit score and income when considering your application. But the good news is that finding the right cosigner can significantly improve your chances of obtaining a private student loan with a lower interest rate and better terms.
Don’t wait to find out what private student loan rates and terms are available to you now.
How to find the right student loan cosigner
To get you started on the right foot, consider these tips for finding the right cosigner for your student loans.
Start with close family
The most natural place to look for a student loan cosigner is within your own family. Parents, in particular, are often the first choice due to their vested interest in your academic success. They may be more likely to have a strong credit history and stable financial situation, increasing your chances of approval for the loan. Your close family is also more likely to take a chance on cosigning your loan, as most will want to see you succeed in your education.
When approaching your family, have an open and honest conversation about your educational plans, loan terms and your repayment plan. Make sure they are fully aware of their responsibilities as a cosigner and only proceed if both parties are comfortable with the arrangement.
Find out today’s top student loan rates right now.
Ask a relative or your inner circle
If your parents are unable to serve as cosigners, consider reaching out to other close relatives or trusted individuals in your inner circle. Siblings, aunts, uncles or grandparents could be potential candidates if they meet the requirements set by the lender. Cosigners typically need to have a good credit score and an income to qualify — and for you to get the best loan terms — so make sure to consider those factors when narrowing down the options.
As with your parents, approach these conversations with transparency, explaining your goals and how their support can help you achieve them. Any potential cosigner should also understand what cosigning on a loan actually entails. While you may have the option to release your cosigner from your student loans in the future, it’s important to be upfront about what the process looks like, potential repercussions and what their obligations may be if you default on your loan.
Be wary of online cosigners
In researching options for a cosigner, you might come across online platforms or services that connect students with potential cosigners. This might seem like a convenient solution, but take caution. Entrusting your financial future to an unknown cosigner could pose risks.
For starters, many online cosigners come with application fees or other types of fees which can increase the cost of borrowing — may not be refunded if you aren’t matched with a cosigner by the service. These types of cosigner services could leave you with little to no control over the cosigner you’re matched with, and whether they meet the requirements by your private lender. This, in turn, could lead to higher interest rates or loan denials.
Depending on the situation, you may be better off applying for a student loan with a higher rate rather than using a cosigner service, but if you do choose this route, always thoroughly vet any potential cosigners you’re matched with.
Learn more about the private student loan rates you may qualify for now.
Consider the alternatives
If finding a cosigner ultimately proves challenging, you may want to explore no-cosigner student loan options instead. While they tend to come with higher interest rates, some private lenders do offer loans specifically designed for students without cosigners. You can also look into student loans with bad credit — like lenders without credit score requirements.
As with any type of loan, it’s important to consider all the factors before choosing, but these alternative loans may be a good way to secure the funds you need without having to track down a cosigner.
The bottom line
Finding a student loan cosigner may be a crucial step in securing financial assistance to pursue higher education. Start by approaching your close family, and if that option isn’t available, consider reaching out to other trusted relatives or individuals in your inner circle. Online cosigners may seem convenient, but be cautious and thoroughly vet potential candidates. You can also consider no-cosigner student loans as an alternative. But no matter what you choose, remember that a well-considered decision will set you on the path to achieving your academic goals with a strong financial foundation.
Idaho student murders suspect Bryan Kohberger reveals alibi claim in new court filing
Bryan Kohberger, the man accused of murdering four University of Idaho students in November, claims he was going for a routine drive when the killings took place, according to new court filings.
Kohberger, 28, has been charged with four counts of first-degree murder and one count of burglary. He’s accused of killing Ethan Chapin, a 20-year-old from Conway, Washington; Madison Mogen, a 21-year-old from Coeur d’Alene, Idaho; Xana Kernodle, 20, from Avondale, Arizona; and Kaylee Goncalves, 21, from Rathdrum, Idaho.
On Wednesday, Kohberger’s attorneys objected to the state’s request for an alibi of his whereabouts on the night of the murder.
In the court documents, his attorneys claim “Mr. Kohberger has long had a habit of going for drives alone,” and that he did so on the night and morning of the brutal killings.
“Mr. Kohberger is not claiming to be at a specific location at a specific time; at this time there is not a specific witness to say precisely where Mr. Kohberger was at each moment of the hours between late night November 12, 2022, and early morning November 13, 2022,” the filing said.
His attorney said that corroborating evidence that Kohberger was not at the scene of the crime will come from the cross-examination of state’s witnesses.
“Mr. Kohberger cannot be more specific about the possible witnesses and exactly what they will say,” the filing said.
A judge entered a not guilty plea on Kohberger’s behalf at his May 22 arraignment after he did not respond in court when the judge asked him how he pleaded.
At the time of the killings, Kohberger was a Ph.D. criminology student and teaching assistant at Washington State University’s Pullman campus, which is only about a 15 minute drive from the home in Moscow, Idaho, where the four students were killed.
Authorities believe the victims were likely asleep when they came under attack, suffering multiple stab wounds from a large, military-style knife.
Court documents filed in the case allege Kohberger’s DNA is near-exact match to the DNA found on a knife sheath at the scene of the murders.
How to get last-minute student loans for fall 2023
Peter Dazeley / Getty Images
As the fall 2023 semester approaches, many students may find themselves facing unexpected financial gaps in their education funding. After all, many families’ budgets are tighter than normal due to issues like higher inflation. And that, coupled with the rising costs of higher education, can make it tough to come up with the cash needed to pay for the upcoming semester.
Data from the Education Data Initiative indicates that the average cost of tuition per student, per year is $36,463 as of August 3, 2023. While that total includes the expenses for supplies, books and daily living, that average cost has more than doubled since 2001 — and has grown at an annual rate of about 2% over the last decade.
If you’re struggling to pay for the fall college semester, don’t panic. There are still a few avenues you can explore to secure last-minute student loans to ensure that you stay on track with your education.
Find out more about private student loan rates and terms here now.
How to get last-minute student loans for fall 2023
If you’re unable to pay for some or all of your education costs this fall, the strategies below may help you obtain the financial assistance you need.
Consider private loans
While it’s important to exhaust your grants and federal loan options first, private student loans can be a viable option for filling the financial void if those options fall short. Private loans are offered by banks, credit unions and online lenders — and these loans come with much higher borrowing limits compared to federal loans.
The turnaround time is also shorter. In general, it doesn’t take more than a day or two for an application decision on a private loan, and in many cases, your application can be approved almost immediately by a private lender. That makes them a great choice when you need last minute funding for the upcoming semester.
It’s worth noting, though, that these loans typically have higher interest rates and different terms compared to federal loans. However, if you have good credit and a strong application — or a creditworthy cosigner — you may qualify for a private student loan with a good interest rate and terms. Just be sure to research and compare offers from multiple lenders to find the best interest rates and loan terms for your needs.
Don’t wait! Learn more about the private student loan rates and terms available now.
Talk to your school’s financial aid office
It may seem like an obvious solution, but if you need last minute funding for the fall semester, it may benefit you to talk to your school’s financial aid office right away. Your college or university’s financial aid office can be an invaluable resource and can help you explore various financial aid opportunities, so be transparent about your financial need and explain any changes in your circumstances that have come up since your financial aid application.
Some schools will offer emergency grants or scholarships specifically for students facing unexpected financial hardships. They may also have information on institutional loan programs with favorable terms — which may be a good last-minute option if you qualify. But as with any other type of student loan, just make sure you understand the terms and conditions, as well as the interest rate you’ll be offered, before making a decision.
Consider an emergency student loan
Many colleges and universities will also offer their own programs for emergency student loans. These loans provide quick cash to students facing urgent financial situations, helping them bridge the gap between available resources and unexpected expenses.
When available, emergency student loans will typically have strict borrowing limits to ensure that the assistance provided is adequate for immediate needs without burdening students with excessive debt. This borrowing limit can vary from one institution to another, so it’s crucial to check with your college’s financial aid office to determine the maximum amount you can borrow.
And because these loans are designed to be short-term solutions, they often require fast repayment to help other students in need. That’s why it’s essential to understand the repayment timeline and ensure you can meet the repayment obligations on time before choosing this option. If you need more repayment flexibility than what these loans can offer, applying for a private student loan is likely a better option.
The bottom line
Securing last-minute student loans requires proactive and informed decision-making. Be sure to consider private loans as an option, but also reach out to your financial aid office for guidance and explore other funding sources like, like emergency student loans or scholarships and grants to see if you qualify. And, remember that being responsible with your finances and borrowing only what is necessary can set you up for a successful financial future.
Memphis gunman identified as former student
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