That giveaway that Joe Biden signed off on is losing some of its luster.
The executive order is being challenged on several different fronts.
Biden is trying to be proactive to keep it in place, so some student loan holders just got the bad news they are no longer a part of the order.
Sorry, You Have to Pay
In addition to a private suit, there are at least six other suits now pending against the program.
So, Biden has now eliminated privately held student loans from his order.
Private companies that were holding loans would have been buried under Joe's program.
Even though this is only a small portion of student loans, that will be little solace to those that have loans with those institutions.
The new change will only impact those that did not apply before September 29, however.
The Department of Education stated, "As of Sept. 29, 2022, borrowers with federal student loans not held by ED cannot obtain one-time debt relief by consolidating those loans into Direct Loans."
"Borrowers with [Federal Family Education Loan] FFEL Program loans and Perkins Loans not held by ED who have applied to consolidate into the Direct Loan program prior to Sept. 29, 2022, are eligible for one-time debt relief through the Direct Loan program."
The DOE added, "Our goal is to provide relief to as many eligible borrowers as quickly and easily as possible, and this will allow us to achieve that goal while we continue to explore additional legally available options to provide relief to borrowers with privately owned FFEL loans and Perkins loans, including whether FFEL borrowers could receive one-time debt relief without needing to consolidate,"
Currently, there are six states suing to halt the program: Missouri, Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina.
In some cases, state pensions are tied to the companies that backed these student loans, so there are some severe financial repercussions at stake here.
Source: New York Post