The change in the parameters of the debt cancelation program won’t materially affect any legal action going forward. But it’s just another indication that
The Biden administration announced that it is narrowing the scope of its student loan debt cancelation program because they’re afraid that loans held by private companies won’t pass legal muster in the courts.
Private entities hold some student loans through a program known as the Federal Family Education Loan Program. About four million borrowers out of the 45 million Americans who have outstanding student loan debt have secured loans through a private source.
The loans are held by various private lenders, guaranty agencies, and loan servicers — any of which would have the standing to sue the administration for canceling the debts.
