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Nine Million Mistakenly Told Their Student Loan Applications Were Approved

The ongoing legal issues have paused any loan forgiveness
Photo: PATCHARIN.IN | Shutterstock

Around nine million Americans that applied for the Biden administration's student-debt relief program were mistakenly told their applications were approved. The title of the email: “Your Student Loan Debt Relief Application Has Been Approved.” 

The emails were part of ongoing updates about loan relief from the U.S. Department of Education. CBS News reported the email informed 16 million debt relief applicants they were approved for forgiveness. But an additional 9 million people received emails saying they received loan forgiveness when they were not approved for relief due to ongoing legal issues.

Local Profile previously reported on November 10, the Secretary of Education Miguel Cardona sent a statement on the District Court Ruling on the Biden-Harris Administration Student Debt Relief Program to those who applied for relief. 

The Fort Worth-based District Court Judge Mark Pittman said the program usurped Congress’s power to make law. The eighth U.S. Circuit Court of Appeals put the forgiveness plan on hold on October 21. Pittman ruled Biden’s loan forgiveness plan is “unlawful” and he claims Biden did not follow the federal procedure to allow for public comment. Pittman was not able to be reached for comment.

“We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breathing room as they recover from the pandemic and to ensure they succeed when repayment restarts,” Cardona said. “We are disappointed in the decision of the Texas court to block loan relief moving forward. Amidst efforts to block our debt relief program, we are not standing down.”

But the emails sent on November 22 and 23 from the U.S. Secretary of Education caused confusion. The title of the email made some of the borrowers believe their applications were approved and once the lawsuits cleared they would receive forgiveness. The error was made by Accenture Federal Services, a contractor with the Education Department, which sent the emails on November 22 and 23. 

"Communicating clearly and accurately with borrowers is a top priority of the Department," a spokesperson for the Education Department told CBS MoneyWatch. "We are in close touch with Accenture Federal Services as they take corrective action to ensure all borrowers and those affected have accurate information about debt relief."

Local Profile contacted the Department of Education but was not able to reach anyone for comment. However, a helpline for the Federal Student Aid Information Center (FSAIC) explained they cannot release if loans were accepted into forgiveness due to the court's hold on the program. 

“Courts have issued orders blocking our student debt relief program,” FSAIC told Local Profile. “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders. If you’ve already applied, we’ll hold your application. Due to the nature of this court order, we are not permitted to check the status of the application if you already submitted one. I apologize that we cannot check that form for you.”

An email from the Department of Education will clarify the issues for those recipients within the next few days.