Nearly 22M have applied for U.S. student debt relief, Biden says as court halts program

US President Joe Biden said on Friday that nearly 22 million people have applied for federal student loan relief in the week since his administration made their online application available – more than half the number the White House believes. that are eligible for the program.

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Later on Friday, however, a federal appeals court issued an administrative stay temporarily blocking Biden’s loan cancellation plan. The Eighth Circuit Court of Appeals issued an adjournment while it considers proposals from six Republican-led states to halt the program.

Speaking at Delaware State University, a historically black university where most students receive federal Pell grants, Biden touted figures for the first week since the application beta-launched last Friday. He made it official at the White House on Monday.

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Biden’s plan seeks $10,000 for federal student loan cancellations for those with an income less than $125,000 a year, or families who make less than $250,000 a year. Those who received a federal Pell Grant to attend college are eligible for an additional $10,000. The plan would make 20 million eligible to completely erase their federal student loans, with about 43 million eligible for at least some loan forgiveness.

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Biden highlighted the ease of application, which doesn’t require users to upload a form or create an account.

“Guys, it takes less than 5 minutes,” Biden said. He said a “vast majority” of applicants have been able to submit to relief from their phones.

It is not clear what the appeals court’s decision means for the lakhs of people who have already applied for relief. The Biden administration had promised not to pay off any debt before October 23 as it grapples with legal challenges, but hopes to wipe out the debt as soon as possible were in mid-November.

White House Press Secretary Karine Jean-Pierre said in a statement Friday night that the pause does not prevent borrowers from applying for relief, and that “we need to review these applications and prepare them for transmission to loan servicers.” doesn’t stop it.”

“It is also important to note that the order does not reverse the dismissal of the case by the lower court, or suggest that the case has merit,” Jean-Pierre said.

The key question now is whether the issue will be resolved before January 1, when payments on federal student loans are expected to resume after being halted during the pandemic. Millions of Americans were expected to completely cancel their loans under Biden’s plan, but they now face uncertainty about whether they will need to start making payments in January.

Biden has said his previous extension of the payment pause would be the last, but economists worry that many Americans may not have achieved the financial level they were in after the upheaval of the pandemic. If borrowers who were expecting debt cancellations are asked to make payments in January, there are fears that many may fall behind on bills and default on their loans.

Louis filed a notice of appeal in the Eighth U.S. Circuit Court of Appeals, hours after US District Judge Henry Autrey ruled that since Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina failed to establish states Went. , “The Court lacks jurisdiction to hear the matter.”

Separately, six states sought an injunction from the district court preventing the administration from implementing the loan cancellation plan until the appeals process is completed.

Biden rebuked Republicans who criticized his relief program, saying “their outrage is misplaced and it is hypocrisy.” “I don’t want to hear it from MAGA Republican officials” who had millions of loans and pandemic relief loans forgiven, he said, naming GOP lawmakers like Reps. Vern Buchanan and Marjorie Taylor Green, who received loan forgiveness, and Sen. Ted Cruz, who called some of the student loan beneficiaries “lazy.”

Asked Biden, “Who do they think they are?”

The Congressional Budget Office has said the program will cost about $400 billion over the next three decades. James Campbell, an attorney with the Nebraska Attorney General’s office, told Autrey in an October 12 hearing that the administration was acting outside its officials in a way that would cost states millions of dollars.

The announcement immediately became a major political issue ahead of the November midterm elections.

Conservative lawyers, Republican lawmakers and business-oriented groups have claimed that Biden overstepped his authority in taking such sweeping action without Congress’s consent. He called it an unfair government gift to the relatively affluent at the expense of taxpayers who did not pursue higher education.

Several Democratic lawmakers, facing a hard-fought re-election, have distanced themselves from the plan.

Justice Department attorney Brian Netter told Autrey at the October 12 hearing that repercussions from the COVID-19 pandemic were still emerging. He said student loan defaults have skyrocketed over the past 2 1/2 years.

Other lawsuits have also sought a halt to the program. Earlier on Thursday, Supreme Court Justice Amy Connie Barrett dismissed the appeal of a group of Wisconsin taxpayers seeking to halt debt cancellation initiatives.