Millions of Student Borrowers Received Incorrect Notice of Relief Approval

On November 22 and 23, more than 9 million borrowers received an email with a misleading subject line indicating that their relief applications had been received and their applications were approved. 

The emails were sent out by Accenture Federal Services, a federal contractor working with the Department of Education. Although the email's subject line erroneously read, “Your Student Loan Debt Relief Application Has Been Approved,” the body of the email provided correct information about the current roadblocks to the Biden-Harris Administration’s plans for student loan debt relief of up to $20,000 per borrower. It stated that all applications are being kept on file with the intent to discharge the debt should they triumph in court.

A representative from Accenture Federal Services told Business Insider that the subject line was a simple case of human error and that new emails would be sent to the 9 million borrowers affected in the near future.

Relief Plan Facing Roadblocks

The November email was intended to update applicants on the current state of the federal student loan relief program. Since the plan to forgive $10,000 per qualified borrower and up to $20,000 per eligible Pell Grant recipient (private student loans are ineligible for this forgiveness) was unveiled on August 25, the executive action has faced multiple challenges in court.

There have been several lawsuits brought against the plan. An 8th Circuit Court of Appeals ruling halted plans for forgiveness after six Republican-led states filed suit claiming that the debt cancellation plan would hurt state revenue streams and violate the Administrative Procedures Act. 

Since the 8th Circuit Court’s ruling on November 14, as well as an October injunction by a Texas judge, all application progress has paused due to injunctions preventing further action. The application for student loan relief has been removed from StudentAid.gov until final decisions are made. 

The Biden-Harris Administration and Secretary Cardona have asked the Supreme Court to review the 8th Circuit Court’s decision. The court has fast-tracked hearings for the case, placing it on the docket for oral arguments in February 2023. The injunction blocking the plan will remain in place until arguments are heard.

Payments Receive Another Extension

Cardona and Biden are holding a united front, vowing to keep fighting for student loan borrowers. On December 1, Biden expressed his commitment on Twitter, saying, “Republican officials are throwing up roadblocks in order to prevent middle-class families from getting the student debt relief they need... We will keep fighting.”

In the meantime, President Biden has announced that the repeatedly-extended payment pause would be extended yet again—this time until 60 days after either the student loan forgiveness program is implemented or the Supreme Court decides the plan’s fate. If the case has not been resolved by June 30, 2023, payments will resume 60 days later.