Monday, December 5, 2022
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US: Court Pauses Biden’s Student Loan Forgiveness Plan

Washington [US]: US’ federal appeals court on Friday issued an administrative stay, temporarily blocking President Joe Biden’s student loan forgiveness program.

The order came from the 8th US Circuit Court of Appeals in reference to the case brought by six Republican-led states after a lower court ruled that their September lawsuit to stop the debt forgiveness program lacked standing, reported CNN. According to CNN, the appeals court gave the administration until Monday to respond to that request, and the states will have until Tuesday to reply to that response. The states had asked the appeals court to act before Sunday, the earliest date the Biden administration had said it would grant student loan discharges.

After the court’s verdict, White House Press Secretary Karine Jean-Pierre said that the “temporary order” would not prevent borrowers from applying for student debt relief at the website.

“We encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has. It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers,” Pierre said as quoted by a press statement released by the White House.

She also noted that the order does not reverse the trial court’s dismissal of the case, or suggest that the case has merit. It merely prevents debt from being discharged until the court makes a decision.

“We will continue to move full speed ahead in our preparations in compliance with this order. And, the Administration will continue to fight Republican officials suing to block our efforts to provide relief to working families,” the statement added.

The lawsuit, which was filed last month, was dismissed on October 20 by a district court judge who ruled that the plaintiffs did not have the legal standing to bring the challenge.
Biden’s student loan forgiveness program was first announced in August with an intention to deliver debt relief to millions of borrowers before federal student loan payments resume in January after a nearly three-year, pandemic-related pause.

Borrowers are eligible for this relief if their individual income is less than $125,000 ($250,000 for married couples). No high-income individual or high-income household – in the top 5 per cent of incomes – will benefit from this action, according to the statement released by White House on August 24.

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