Biden administration stops taking applications for student loan forgiveness

The Biden administration has stopped accepting applications for federal student loan forgiveness after a court struck down the plan on Thursday evening.

“Courts have issued orders blocking our student debt relief program,” in line with a note on the forgiveness application page at Studentaid.gov. “In consequence, presently, we aren’t accepting applications. We’re in search of to overturn those orders.”

The suspension of the forgiveness program comes shortly after a federal judge in Texas rejected President Joe Biden’s executive motion in August to cancel as much as $20,000 in student debt for tens of tens of millions of Americans.

“On this country, we aren’t ruled by an all-powerful executive with a pen and a phone,” wrote Judge Mark Pittman of the U.S. District Court for the Northern District of Texas, in his 26-page decision. Pittman, who was appointed in 2019 by former President Donald Trump, sided with the Job Creators Network Foundation, a conservative advocacy group.

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The group had called Biden’s plan “irrational, arbitrary and unfair,” and accused the president of overreaching his authority. Their criticism argued that the White House ignored federal procedures by not seeing public comment on its program.

The Biden administration said the Justice Department has already appealed the choice.

“We imagine strongly that the Biden-Harris Student Debt Relief Plan is lawful and obligatory to provide borrowers and dealing families respiration room as they get better from the pandemic and to make sure they succeed when repayment restarts,” Education Secretary Miguel Cardona said in a press release. “Amidst efforts to dam our debt relief program, we aren’t standing down.”

“Such injury is required to ascertain what courts call ‘standing,'” said Laurence Tribe, a Harvard law professor.

The GOP-led states didn’t hand over after their lawsuit was thrown out. They filed an appeal, and asked the court to remain the president’s plan, which was presupposed to start unfolding in October, while their request is taken into account.

The eighth U.S. Circuit Court of Appeals granted the states’ emergency petition, leaving the Biden administration unable to start out forgiving any student debt.

Nevertheless, the Education Department had encouraged borrowers to proceed applying for forgiveness since its plan had not yet been struck down.

On Aug. 24, Biden announced that tens of tens of millions of Americans could be eligible for student loan forgiveness: as much as $20,000 in the event that they received a Pell Grant, which is a form of aid available to low-income families, and as much as $10,000 in the event that they didn’t.

Long before Biden — acting on pressure from consumer advocates and other Democrats — made his move, Republicans had criticized student loan forgiveness as a handout to well-off college graduates. Additionally they argued the president did not have the facility to forgive consumer debt on his own without Congress.

Unsurprisingly, the legal challenges poured in. Up to now, at the least six lawsuits have been brought against the president’s plan. 

Originally, the Education Department had said that borrowers would receive forgiveness inside six weeks after they applied. The total application launched Oct. 17, and inside three weeks, some 26 million people had requested the relief. Up to now, 16 million of those requests have been approved.

For now, the department says it can hold the applications of borrowers who’ve already applied.

That is breaking news. Please check back for updates.