The Biden administration warned of "historically large increase" in federal student loan delinquency and defaults without its forgiveness plan, according to a new court filing.
The years-long pause on loan repayment will expire in December, and the program's fate has yet to be decided.
"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 loans delinquency and defaults as a result of the Covid-19 pandemic," the department's under secretary, James Kvaal said in the filing.
He added: "This could result in one of the harms that the one-time student loan debt relief program was intended to avoid. The approximately 18 million borrowers eligible for one-time debt relief who would have their federal student loans discharged in their entirety under the program" are most at risk of defaulting.
The Biden student loan forgiveness initiative has faced a plethora of legal challenges.
Some have been dismissed, but a federal appeals court upheld one suit and blocked the program on Monday, days after a federal judge in Texas struck it down.
The Biden administration stopped accepting applications after a federal judge in Texas declared the program illegal.
More than 26 million borrowers have given the Education Department information for consideration for student debt relief.
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