Biden student debt relief program no longer accepting applications after lawsuit

The Department of Education is no longer accepting applications for its student debt relief program after a Texas judge Thursday night blocked the show from going ahead.

“Student loan debt relief is on hold,” says the government’s website for student debt relief. “The courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications.”

“We seek to vacate those orders,” the website says, referring to an appeal filed Thursday night by the Justice Department.

The program, announced at the end of Augustwould give $10,000 in relief to borrowers making less than $125,000 a year, or $250,000 as a married couple, and $20,000 in relief to borrowers who meet the same salary standards and also received Pell Grants for college, which are federal grants awarded to low income people. income families.

The White House continues to express confidence that they will prevail in the president’s student loan relief program, but won’t say what will happen if this drags on beyond December 31 and student loan payments restart.

“Should people who have student loans applying for this program, they should be prepared to start paying them back on December 31st,” ABC News’ Molly Nagle asked White House press secretary Karine Jean-Pierre during a meeting. Friday on Air Force One.

“I think we will prevail,” he said, and had no further comment on whether Biden would extend the pause on student loan payments one more time as it makes its way through the courts.

The Biden administration had pledged to begin debt relief by Dec. 31, when the moratorium on student debt payments is lifted after a two-year pause due to the COVID-19 pandemic.

But this is the first time a lawsuit has led the Education Department to shut down its application, muddying the waters over whether borrowers will see relief before they have to start paying off their loans again at the start of the new year.

President Joe Biden delivers remarks on the student debt relief portal beta test, in the South Court Auditorium of the Eisenhower Executive Office Building in Washington, DC, on October 17, 2022.

Brendan Smialowski/AFP via Getty Images

The show has faced a handful of lawsuits in recent months. Two of those lawsuits were dismissed by courts that found the conservative groups bringing the claims to be baseless, while another lawsuit being heard in the Eighth Circuit Court of Appeals recently put the show on temporary pause while arguments played out. .

That lawsuit, filed by six conservative states that opposed the program, allowed borrowers to continue applying for the programbut it prevented the Department of Education from discharging any debt relief until the court issued its ruling.

But Thursday night’s ruling in Texas caused another, more complicated hurdle in the program.

The lawsuit, brought by a conservative group called the Job Creators Network Foundation, argued that the policy unfairly excluded people and should have been created with more input from the public.

US District Judge Mark T. Pittman, who was appointed by former President Donald Trump, wrote in his ruling that whether loan relief “constitutes good public policy is not the role of this Court to determine,” instead, it focuses on government overreach. “No one can plausibly deny that it is one of the largest delegations of legislative power to the executive branch, or one of the largest exercises of legislative power without congressional authority, in United States history,” he wrote.

Pittman wrote that there was no clear justification for the Biden administration to exert such influence.

“The Court does not ignore the current political division in our country. But it is critical to the survival of our Republic that the separation of powers as outlined in our Constitution be maintained,” he wrote.

The Biden administration and Education Secretary Miguel Cardona responded quickly Thursday night.

Jean-Pierre said they “strongly disagree” with the Texas court’s ruling and that the Justice Department has filed an appeal.

Cardona reiterated the White House’s commitment to fight the ruling and said the Department of Education “is not backing down.”

“We are disappointed in the Texas court’s decision to block loan relief from moving forward. Amid efforts to block our debt relief program, we are not backing down. The Justice Department appealed today’s decision.” on our behalf and we will continue to keep borrowers informed about our efforts to provide targeted assistance,” Cardona said.

The administration is still confident that the program is “lawful and necessary,” Cardona said.

As of last Thursday, about 26 million people had applied for the program. The Biden administration said he had approved 16 million of those relief requests, as soon as they were legally able to start sending payments.

But the latest court problems leave an estimated 17 million eligible Americans barred from the program for now. The application was supposed to be active until December 2023, giving borrowers 12 more months to learn about the program and apply.

In the meantime, as the lawsuits play out in court, the Department of Education encouraged borrowers to sign up for its newsletter to get the most up-to-date information on the program’s next steps.

Justin R. Gomez of ABC News contributed to this report.

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