Student loan forgiveness: Biden administration dealt another setback in court in effort to revive student loan debt relief policy

CNN
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A second federal appeals court has rejected a Biden administration bid to put on hold a ruling blocking the President’s student debt relief policy.

The 5th US Circuit Court of Appeals ruled Wednesday night that it would not pause a ruling from a Texas judge striking down the policy while an appeal of the ruling played out.

The move sets the stage for the US Justice Department to take the case to the US Supreme Court, which is already considering a separate request from the Biden administration that it reverse an order from the 8th US Circuit Court of Appeals blocking the loan forgiveness program.

The 5th Circuit denial was handed down by a panel made up of a George W. Bush appointee, a Barack Obama appointee and a Donald Trump appointee.

They did not explain their reasoning for rejecting the administration’s request, but the panel ordered the full appeal to be considered on an expedited basis.

Nearly two weeks ago, the Biden administration began notifying people who are approved for federal student loan relief, even as the future of that relief remains in limbo since lower courts blocked the program nationwide. The emails from the US Department of Education to borrowers acknowledged recent legal challenges have kept the administration from discharging the debt.

Biden’s program would offer up to $20,000 of debt relief to millions of qualified borrowers. It has drawn criticism, especially from Republicans, and drummed up legal challenges.

The November 10 Texas ruling upheld by the appeals court Wednesday declared Biden’s program illegal. That prompted the education department to halt accepting loan relief applications.

About 26 million people had applied for student loan relief prior to the recent court decisions with 16 million of those applications being approved, according to the Biden administration.

Federal student loan payments that had been paused during the Covid-19 pandemic were set to resume in January. But the Biden administration again extended the pause period as legal battles continue.

The payment pause will last until 60 days after the litigation is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, payments will resume 60 days after that, according to the Department of Education.

“I’m completely confident my plan is legal,” said President Joe Biden in a video posted on Twitter last week, referencing his student loan forgiveness program.

“But it isn’t fair to ask tens of millions of borrowers eligible for relief to resume their student debt payments while the courts consider the lawsuit,” he added.