Application for student loan forgiveness closed after court ruling

A district judge ruled Biden’s debt relief plan unconstitutional in Brown v. Department of Education. The administration is appealing the decision.

President Joe Biden announced his administration’s plan for the widespread cancellation of student loans at the end of August. Under this planned program, the Ministry of Education would forgive $10,000 of student debt for anyone earning less than $125,000 a year and $20,000 of student debt for people under this annual income limit who have received Pell grants.

In October, applications to receive this $10,000 or $20,000 in student debt relief opened. Although the administration did not give a specific timeline as to when it would forgo the loans, it said the pause in loan repayments would end in January 2023.

An earlier court order suspended the program, but only while an appeals judge considered the merits of a lawsuit against the administration. At that time, the application remained open. But now people claim The app has been closed.

THE QUESTION

Did the Biden administration withdraw the request for student loan forgiveness after a court ruling?

THE SOURCES

THE ANSWER

Yes, the Biden administration withdrew the request for student loan forgiveness after a court ruling.

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WHAT WE FOUND

On November 10, 2022, a U.S. District Court Judge in Texas sided with the plaintiffs in Brown v. US Department of Education, a lawsuit in which the plaintiffs sought an end to the student loan forgiveness program. The plaintiffs allege that the Department of Education unlawfully ignored the notice and comment requirement of the Administrative Procedure Act, which requires federal agencies to solicit public comment before making rules.

The judge blocked the pardon program after declaring it “illegal”.

On November 11, 2022, the application form for the Student Loan Forgiveness Program has been withdrawn.

“Courts have issued orders blocking our student debt relief program,” the application form webpage reads. November 11th. “As a result, at this time, we are not accepting applications. We are seeking to rescind these orders.

This is different from the November 10 post, when the app was still available.

“Following a court order, we are temporarily prevented from processing debt discharges,” read the notice on November 10, with the app still open underneath. “We encourage you to apply if you are eligible. We will continue to review applications. We’ll process releases quickly when we’re able to and you won’t need to re-apply.

More CHECK: Yes, court order suspended Biden’s student loan forgiveness program

The change between November 10 and November 11th is also reflected on the Student Debt Relief information page. The Department of Education has indicated it will retain applications from people who have already applied, while the Biden administration seeks to appeal.

Prior to the latest decision, the debt release was only temporarily suspended while a judge considered a decision on another lawsuit. Since October 20, the Court of Appeals for the Eighth Circuit of the United States has considered an appeal in Nebraska State vs. Biden, a lawsuit in which attorneys general from six states say the pardon program would cause financial harm to their state, after a district court sided with the Biden administration. On October 24, the Court of Appeal ordered a stay barring the Biden administration from paying off any student debt under its plan while the court considers the appeal.

In Brown v. US Department of Education, the district court ruled against the administration and the pardon program, declare administration program “an unconstitutional exercise of congressional legislative power” that “must be struck down.”

The Ministry of Education has filed an appeal, which would take the case to the Fifth Circuit Court of Appeals. There, a judge will uphold the lower court’s decision, leaving the program vacant, or overturn the decision and lift the blocking of the program. Whatever decision the court makes, it is likely that the lawsuit will then be appealed to the Supreme Court. If the Supreme Court refuses to rule on the case, the decision rendered by the Court of Appeal will be final.

Even if the Fifth Circuit quickly sides with the administration, the Department of Education will not be able to pay its debt under the program until all court orders temporarily blocking the program or canceling it entirely will not be lifted. Currently, the temporary stay issued by the judge in State of Nebraska v. Biden is the only other court order blocking the program.

More CHECK: Quick Facts About Student Loan Forgiveness

More CHECK: Yes, a change to the Student Loan Forgiveness Plan excludes some borrowers from relief

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