Student loan debt: 9 million wrongly told they were approved for debt forgiveness

Around 9 million Americans who applied for student loan debt relief under the Biden Administration’s forgiveness program were sent an email with a subject line that mistakenly told them their student debt had been canceled, according to the Education Department.

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The content of the emails correctly explained that their applications had been accepted, but the process for approval for debt forgiveness has been on hold because of legal challenges to the plan.

As first reported by Insider, the error was made by Accenture Federal Services, a contractor for the agency. Accenture will be sending new emails with a corrected subject line in the coming days, the DOE said.

Stacey Jones, the senior managing director and head of corporate communications for Accenture, said the company “regrets the human error that led to an email being sent to a number of student loan debt relief applicants with an inaccurate subject line.”

“The email was sent on behalf of the Department of Education on Nov. 22 and 23,” Jones said. “Working closely with the Department, Accenture Federal Services will review quality control measures to support accurate and timely communications to applicants in the Student Loan Debt Relief program.”

No applications have been approved since October when rulings in two lawsuits against the agency over the program halted processing of applications.

According to the DOE, 26 million people had submitted applications for relief of federally backed student loans with 16 million approved.

Last week, the U.S. Supreme Court agreed to hear the case in the case brought by six states who claim the president does not have the authority to forgive commercial debt. The court has not said how it will address the second suit, or if it will combine the two.

Biden announced last week that he would be extending the pause on paying back federally funded student loan debts until 60 days after the Biden administration is allowed to implement its student loan forgiveness plan and litigation is resolved, according to a news release by the U.S. Department of Education.

If it can’t proceed with its policy and the legal challenges are still unfolding by June 30, 2023, student loan payments will restart 60 days after that.

The Supreme Court will hear arguments in February and a ruling is expected near the end of the court’s term in June.

Biden announced the program in August saying it would allow up to 40 million borrowers to receive $10,000 of student loan forgiveness for those making less than $125,000 a year, or households making less than $250,000.

Pell Grant recipients will be eligible for an additional $10,000 in debt forgiveness.