Biden's student debt relief program no longer accepting applications after trial

Biden’s student debt relief program no longer accepting applications after trial

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

“Student debt relief is blocked,” says the government’s Student Debt Relief website. “The courts have issued orders blocking our student debt relief program. Therefore, at this time, we are not accepting applications.”

“We are seeking to overturn these orders,” the website says, referring to an appeal filed late Thursday by the Justice Department.

The program, announced in late August, would provide $10,000 in assistance to borrowers who earn less than $125,000 a year, or $250,000 as a married couple, and $20,000 in assistance to borrowers who meet the same standards wages and also received Pell Grants for College, which are federal grants given to low-income families.

The White House continues to express confidence that it will prevail over the president’s student loan relief package, but won’t say what will happen if it extends past Dec. 31 and loan repayments students resume.

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

“I think we’ll prevail,” she said and made no further comment on whether Biden would once again extend the pause on student loan repayments while it unfolds. was making its way through the courts.

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

But it is the first time a lawsuit has led to the Department for Education shutting down its app, muddying the waters over whether borrowers will see relief before they have to start repaying their loans again at the start of the new year.

PHOTO: 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, October 17, 2022.

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, October 17, 2022.

Brendan Smialowski/AFP via Getty Images

The program has faced a handful of lawsuits in recent months. Two of those lawsuits were thrown out by courts that found the conservative groups filing the complaints lacked standing, while another lawsuit pending in the Eighth Circuit Court of Appeals recently put the program on hold. temporarily paused while the arguments unfolded.

The lawsuit, brought by six conservative states opposed to the program, allowed borrowers to continue applying for the program, but prevented the Department of Education from paying any debt relief until the court issued its ruling. decision.

But Thursday night’s decision in Texas brought another, more complicated hurdle to the schedule.

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

U.S. 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 for this Court to determine”, focusing instead on the government’s overbreadth. “No one can plausibly deny that this is either one of the greatest delegations of legislative power to the executive or one of the greatest exercises of legislative power without congressional authority in the history of the United States,” he wrote.

Pittman wrote that there was no clear rationale for the Biden administration to wield such influence.

“The Court is not blind to the current political division in our country. But it is fundamental to the survival of our Republic that the separation of powers as set forth in our Constitution be preserved,” he wrote.

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

Jean-Pierre said they “strongly disagree” with the Texas court’s decision and the Justice Department has appealed.

Cardona reiterated the White House’s commitment to fight the decision, saying the Department of Education “is not backing down.”

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

The administration remains confident the program is “legal and necessary,” Cardona said.

As of Thursday, around 26 million people had submitted applications for the program. The Biden administration said it approved 16 million of those relief requests, as soon as it was legally able to start sending payments.

But the latest legal troubles leave about 17 million eligible Americans excluded from the program for the time being. The application was supposed to be live until December 2023, giving borrowers an additional 12 months to hear about and apply for the scheme.

In the meantime, as the lawsuits unfold in court, the Department of Education has encouraged borrowers to sign up for their newsletter for the most up-to-date information on the next steps of the program.

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

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