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Student loan relief: Biden administration tells approved applicants program remains stuck in court

By on November 19, 2022 0



CNN

The Biden administration began Saturday notifying people who are approved for federal student loan relief, though the future of that relief remains in limbo after lower courts blocked the program nationwide.

The Department of Education has begun emailing borrowers who have been approved for federal student loan relief, explaining that recent legal challenges have prevented the administration from paying off the debt.

“We have reviewed your application and determined that you are eligible for loan relief under the plan,” Education Secretary Miguel Cardona wrote in the email, which was provided to CNN. “We have sent this approval to your loan manager. You do not need to do anything further.”

“Unfortunately, a number of lawsuits have been filed challenging the program which has blocked our ability to pay your debt at this time. We strongly believe the lawsuits are without merit and the Department of Justice has appealed on our behalf,” Cardona added.

Cardona’s email further explains that the administration “will discharge your approved debt if and when we prevail in court” and promises to provide further updates.

The program, which would provide up to $20,000 in debt relief to millions of qualified borrowers, remains on hold after lower courts blocked the program.

The Biden administration has been unable to pay any debts and has stopped accepting claims due to court rulings. About 26 million people applied for student loan relief before recent court rulings, with 16 million of those applications approved, according to the Biden administration.

“President Biden is fighting to get millions of borrowers the relief they need and deserve,” White House spokesman Abdullah Hasan said. “Some Republican officials and special interests are preventing this from happening. We make it clear to student borrowers who is with them and who is not.

The Biden administration on Friday asked the Supreme Court to allow its student debt relief program to take effect while legal challenges continue.

A “misguided injunction” from a federal appeals court, Solicitor General Elizabeth Prelogar told the Supreme Court, “leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable make financial decisions with an accurate understanding of their future. reimbursement obligation.

Government lawyers say President Joe Biden acted to address the financial damage of the pandemic and “smooth the transition to repayment” to provide targeted debt relief to some federal student loan borrowers affected by the pandemic.

The Supreme Court asked the plaintiffs for a response Wednesday noon.

The Biden administration’s request comes as the 8th Circuit Court of Appeals earlier this week issued a nationwide injunction on the program following a challenge from Republican-led states, which argue that the plan to student debt relief violates separations of powers and administrative procedure law. , a federal law that governs the process by which federal agencies issue regulations.

This follows a ruling by a Texas federal judge that declared the program illegal earlier this month.

Federal student loan payments are expected to resume in January after a year-long hiatus due to the pandemic.

When asked if the administration is considering extending the moratorium on student loan repayments, White House press secretary Karine Jean-Pierre said the administration is “looking at all options to give middle-class families a little more respite”.

The president last extended the freeze on federal student loan payments in August when he rolled out the sweeping student debt relief package.