Student loan relief: Biden administration notifies approved applicants as program remains tied up in courts

CNN
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The Biden administration started notifying individuals who are approved for federal student loan relief on Saturday even as the future of that relief remains in limbo after lower courts blocked the program nationwide.

The Department of Education began sending emails to borrowers who have been approved to have their federal student loans relieved, explaining that recent legal challenges have kept the administration from discharging the debt.

“We reviewed your application and determined that you are eligible for loan relief under the Plan,” Education Secretary Miguel Cardona wrote in the e-mail, which was provided to CNN. “We have sent this approval on to your loan servicer. You do not need to take any further action.”

“Unfortunately, a number of lawsuits have been filed challenging the program, which have blocked our ability to discharge your debt at present. We believe strongly that the lawsuits are meritless, and the Department of Justice has appealed on our behalf,” Cardona added.

Cardona’s e-mail further explains the administration will “discharge your approved debt if and when we prevail in court” and promises to provide further updates.

The program, which would offer up to $20,000 of debt relief to millions of qualified borrowers, remains on hold after lower courts blocked the program.

The Biden administration has been unable to discharge any debt and stopped accepting applications due to the court rulings. About 26 million people applied for student loan relief prior to the recent court decisions with 16 million of those applications being approved, according to the Biden administration.

“President Biden is fighting to get millions of borrowers the relief they need and deserve,” White House spokesperson Abdullah Hasan said. “Some Republican officials and special interests are blocking that from happening. We’re making clear to student borrowers who is standing with them, and who isn’t.”

The Biden administration asked the Supreme Court on Friday to allow its student debt relief program to go into effect while the legal challenges continue to play out.

An “erroneous injunction” from a federal appeals court, Solicitor General Elizabeth Prelogar told the Supreme Court, “leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations.”

Government lawyers say that President Joe Biden acted in order to address the financial harms of the pandemic and “smooth the transition to repayment” in order to provide targeted debt relief to certain federal student-loan borrowers affected by the pandemic.

The Supreme Court has asked the plaintiffs for a response by noon on Wednesday.

The Biden administration’s request comes as the 8th Circuit Court of Appeals earlier this week issued a nationwide injunction on the program following a challenge by Republican-led states, who argue that the student loan debt relief plan violates the separations of power and the Administrative Procedure Act, a federal law that governs the process by which federal agencies issue regulations.

This followed a ruling from a federal judge in Texas who declared the program illegal earlier this month.

Payments on federal student loans are set to resume in January after a years-long pause due to the pandemic.

When asked if the administration is considering extending the moratorium on student loan payments, White House press secretary Karine Jean-Pierre said the administration is “examining all options to provide middle-class families a little extra breathing room.”

The president last extended the freeze on federal student loan payments in August when he rolled out the sweeping student debt relief plan.