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Biden Administation Suspends Student Loan Forgiveness Application After Court Ruling

The Education Department has shut down the application for borrowers to apply for President Biden’s one-time student loan forgiveness initiative. A federal court struck down the program as illegal, putting the plan in serious jeopardy.

Court Strikes Down Biden’s Student Loan Forgiveness Plan

A Texas-based federal court ruled on Thursday that Biden’s sweeping student loan forgiveness plan is illegal. Biden’s one-time debt cancellation initiative would have provided $10,000 or more in student loan forgiveness to tens of millions of borrowers who met loan and income eligibility criteria.

The federal judge, a Trump appointee, ruled that Biden’s plan was “an unconstitutional exercise of Congress’s legislative power.” He declared the program unlawful, and blocked its implementation.

Republican leaders praised the court’s ruling. “Yet another nail has been added to the coffin of President Biden’s illegal student loan bailout,” said Rep. Virginia Foxx (R-NC), Republican leader on the Education and Labor Committee, in a statement on Friday.

Biden Administation Suspends Student Loan Forgiveness Application

In response to the court ruling, the Biden administration has indefinitely suspended the application to request loan forgiveness under the initiative.

“Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications,” reads a message on the application website.

Both the paper application and online application are no longer available for borrowers who have not yet applied.

Education Department Will Hold Submitted Student Loan Forgiveness Applications While it Appeals

President Biden said last week that 26 million borrowers already submitted their application for student loan forgiveness. The Education Department had continued to accept applications even while another federal court had blocked implementation of the program following an appeal associated with a separate legal challenge.

The Education Department is appealing yesterday’s decision from the Texas court, and officials indicated that the Department will hold on to student loan forgiveness applications that have already been submitted.

“If you’ve already applied, we’ll hold your application,” says a message on the application website. The Education Department is offering borrowers the option to subscribe for updates so they can be notified if and when the program can resume.

“For the 26 million borrowers who have already given the Department of Education the necessary information to be considered for debt relief – 16 million of whom have already been approved for relief – the Department will hold onto their information so it can quickly process their relief once we prevail in court,” said White House Press Secretary Karine Jean-Pierre in a statement.

Overturning the court’s decision on appeal may be an uphill battle for the Biden administation, but officials are projecting determination.

“We will never stop fighting for hardworking Americans most in need – no matter how many roadblocks our opponents and special interests try to put in our way,” said Jean-Pierre.

Further Student Loan Forgiveness Reading

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What The Election Results Mean For Student Loan Forgiveness: 4 Key Takeaways

Can You Apply For Multiple Student Loan Forgiveness Programs? Yes — With Some Caveats

A New, Bigger Student Loan Forgiveness Initiative Is Set To Launch — And It’s Not The One That You Think