Student loan default rates could dramatically spike if the Biden administration’s loan forgiveness plan is blocked, a top official at the U.S. Department of Education said in a new court filing.
The warning came as the Department of Justice asked a federal judge in Texas to stay an order that has temporarily blocked the Biden administration’s debt relief program.
“Unless the [Education] Department is allowed to provide debt relief, we anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic,” Education Department Undersecretary James Kvaal said in the filing.
