Topline
Scores of student loan borrowers reported they were unable to access their loan details Wednesday after President Joe Biden announced his long-awaited student debt forgiveness plan, which apparently led to a flood of users overloading servicers’ websites.
Joe Biden makes his point to the Chicago Council on Global Affairs on November 1, 2017, in Chicago.
Key Facts
Nelnet, which processes more than 40% of all federal student loans, making it by far the largest federal student loan servicer, trended on Twitter as borrowers complained about not being able to access the website.
The website for the Federal Agency for Student Aid, or FAFSA, also experienced a sharp outage spike starting right after the White House announced its plan, according to Downdetector.
Several other servicers’ websites, including the sites run by Aidvantage, EdFinancial Services and MOHELA, also appeared to experience slowdowns or crashes.
Nelnet spokesman Ben Kiser suggested in a statement to Forbes that Wednesday’s move caught servicers off guard, saying “servicers and borrowers are learning about this plan simultaneously through the media.”
Crucial Quote
“We don’t have details to share with borrowers who want to know about their eligibility and possible time line for cancellation when they call in or visit our website,” Kiser said.
Key Background
The White House announced broad $10,000 federal student loan forgiveness Wednesday for borrowers making less than $125,000 a year, but those who received Pell Grants to attend college are eligible for $20,000 in debt cancellation. The move will provide relief for up to 43 million borrowers, with around 20 million borrowers having their federal debt fully canceled, according to the White House. The pause on loan repayments that has been in place since the beginning of the Covid-19 pandemic will also “be extended one final time” through the end of the year.
Big Number
27 million. That’s how many borrowers the White House said are eligible for $20,000 in relief. More than 60% of borrowers received Pell Grants, according to the White House.
What To Watch For
There could be lawsuits to challenge Biden’s executive order, but it is not clear how that would impact the implementation of debt relief.
Further Reading
Biden’s Student Loan Forgiveness Plan: Here’s Who Benefits Most—And Least (Forbes)
What You Need to Know About Biden’s Student Loan Forgiveness Plan (New York Times)
Source: https://www.forbes.com/sites/nicholasreimann/2022/08/24/student-loan-websites-crash-after-biden-announces-debt-relief/