As millions of people began applying for much-needed student loan debt relief, a federal appeals court blocked the program, barring the Biden administration from canceling any loans.
The Eight Circuit Court of Appeals issued an administrative stay while considering a motion filed by six Republican-led states. The administration has until Monday to respond, and the states will have until Tuesday to issue a response to the administration.
The program, announced in August by President Joe Biden, aims to cancel billions of dollars in student loan debt. Borrowers who earned less than $125,000 in either 2020 or 2021 and married couples or heads of households that earned less than $250,000 are eligible to have $10,000 of their debt canceled.
If the borrower received a Pell grant, they would be eligible to have an additional $10,000 forgiven. Within days of opening the application for relief, nearly 22 million people applied.
Despite the ruling, White House press secretary Karine Jean-Pierre encouraged borrowers to continue to apply. She stressed that the administrative stay does not prevent applications from being filled out or reviewed.
“Tonight’s temporary order does not prevent borrowers from applying for student debt relief at studentaid.gov – and we encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has,” she said. “It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers.”
Now, we wait to see if the legal issues surrounding the debt relief program will be resolved before student loan payments are set to resume on January 1. Federal student loans were paused throughout the pandemic.
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