Education Department says that a subset of federal student loans owned by private lenders no longer qualify for relief.
By Michael Stratford, Politico
The Biden administration is scaling back its debt relief program for millions of Americans over concerns about legal challenges from the student loan industry as well as a new lawsuit from Republican-led states.
In a reversal, the Education Department said on Thursday it would no longer allow borrowers who have federal student loans that are owned by private entities to qualify for the relief program. The administration had previously said those borrowers would have a path to receive up to $10,000 or $20,000 of loan forgiveness.

The policy change comes as the Biden administration this week faces its first major legal challenges to the loan forgiveness program, which Republicans have railed against as an illegal use of executive power that is too costly for taxpayers.
On Thursday, a group of six GOP attorneys general sued to block loan forgiveness. The states of Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina asked a federal judge to strike down the debt cancellation program, arguing that it’s illegal and unconstitutional.
The student loans that are guaranteed by the federal government but held by private entities account for a relatively small, and shrinking, subset of all outstanding federal student debt. They comprise just several million of the roughly 45 million Americans with federal student loans.
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