LITTLE ROCK, Ark. — President Biden's administration's plan to cancel some student loan debt hit a legal challenge.
In August, the president announced debt relief for thousands of students, but now he will scale back the plans amid a lawsuit from several states— including Arkansas.
This change will mainly impact people who have privately held federal student loans.
The Department of Education initially said that some of those borrowers would be eligible for the one-time forgiveness.
On Thursday, Arkansas joined Iowa, Kansas, Missouri Nebraska, and South Carolina in accusing the Biden Administration of overstepping its executive powers.
"In reality, the president's actions violate the law and his authority as president," Attorney General Leslie Rutledge said in a press conference.
She and leaders in other states hoped to block President Biden's plans to forgive up to $10,000 for those who didn't receive Pell Grants and up to $20,000 for those who did.
"President Biden is using this law to justify this forgiveness with COVID being the national emergency. Perhaps, Biden has forgotten that he declared the COVID pandemic over," Rutledge said.
Now, the White House will be scaling back on some of its forgiveness plans.
On Thursday, the Department of Education updated the qualifications to reflect these changes on its website.
Now, borrowers with federal loans owned by private banks will not qualify for the president's plan unless they've applied to consolidate their loans before September 29.
What that means is borrowers need to combine all of their private student loans into the federal direct loan program before Thursday. October 6.
The Department of Education said that the application for the student debt relief program will still be set to open next month.
The White House didn't provide a specific date.