Court temporarily halts Biden’s student loan cancellation plan as nearly 22 million people so far have applied

Biden’s long-awaited initiative has proved popular, with student debt relief advocates praising the simplicity of the application process. The online application has held up to strong initial demand, in contrast to Federal Student Aid’s website, which crashed shortly after Biden announced its debt relief plan in August.

Individuals earning up to $125,000 per year or households with annual incomes of less than $250,000 are eligible for $10,000 in student debt forgiveness, with an additional $10,000 relief for those who received state Pell grants. The Biden administration has estimated that 40 million Americans, including more than 800,000 Massachusetts residents, are eligible for the program, which the Congressional Budget Office has estimated will cost $400 billion.

People should continue to apply for the program, White House press secretary Karine Jean-Pierre said Friday night after the court ruling. She noted that the suspension does not prevent the Biden administration from reviewing applications and preparing to send them to loan servicers, only from actually paying off the debt.

“We will continue to move forward with our preparations at full speed in accordance with this order,” she said in a written statement. “And the administration will continue to fight Republican officials who sue to block our efforts to relieve working families.”

Biden promoted the program in a speech at Delaware State University on Friday.

“My commitment when I ran for President of the United States that if elected, I would make government work and deliver for the people,” Biden said. “A simple application process keeps that commitment going. Just as I’m keeping my promise to forgive student debt.”

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The Department of Education will not forgive student debt before Oct. 23, according to a legal motion filed this month by the Biden administration. Some people, e.g. B. Individuals already on income-based repayment plans are eligible for automatic student loan termination, but will not see their discharge until after November 14 to give them an opportunity to opt out.

Opponents of debt relief have filed lawsuits to stop it, including a group of Republican attorneys general from Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. That lawsuit was dismissed by federal judges Thursday on the grounds that the states had no standing to sue. But the Eighth Circuit Court of Appeals on Friday granted a stay until it could rule on the states’ request to block the program.

Before the appeals court decision, Biden criticized states and other opponents for legal challenges.

“Republican congressmen and Republican governors are doing everything they can to deny that relief even to … their own constituents,” he said in his speech at Delaware State University. “As soon as I announced my government’s plan on student debt, they started attacking it and saying all sorts of things. Your outrage is false and hypocritical.”

A supporter of student debt relief downplayed Friday’s court ruling.

“We want to make it clear that this is part of the legal process,” said Cody Hounanian, executive director of the Student Debt Crisis Center. “We are confident that the President’s debt relief plan will remain in place and that borrowers will be relieved in a timely manner.”

Representative Ayanna Pressley, a Boston Democrat and vocal advocate of student debt relief, said Wednesday that she was not concerned about the legal challenges, which she described as a typical Republican strategy.

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“I don’t think much of these frivolous lawsuits,” she said. “They are a diversionary tactic.”

When Pressley met with student leaders at Boston University on Tuesday, she asked for a show of hands if they had already applied. Around 80 percent of the hands went up, she said.

But Pressley said more needed to be done to publicize the application and ensure every eligible person received credit relief. She and Massachusetts Senator Elizabeth Warren, a Democrat who has made the issue a cornerstone of her office, will tour the state on Tuesday Encourage residents to apply.

“It’s not true, ‘if you build it, they’ll come,'” Pressley said. “That’s only true if they know about it, and that’s why we’re going to shout that from the rooftops.”

Proponents see room for improvement. They want the administration to create a paper form for those without internet access and found that some expatriate borrowers reported that they could not access the online application.

Many advocates had pushed for automatic loan termination in the past and are concerned about the application will serve as a barrier for potential beneficiaries. Others are concerned that the steps some borrowers take to verify their income, such as For example, dependent students whose eligibility is determined by their parents’ income will reduce the number of borrowers who ultimately receive credit relief.

“Every time you add a step, it just adds to the confusion,” said Braxton Brewington, spokesman for Debt Collective, a group pushing for sweeping debt relief. “It’s not about the simplicity or complexity of the application, it’s about the existence of the application.”

The Department of Education estimated last month that 81 percent of eligible borrowers, or about 32 million people, would apply for relief.

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Claudio Martinez, executive director of Zero Debt Massachusetts said his The grassroots organization’s outreach focuses on those hardest hit by the student loan crisis, particularly black, Latino, and low-income borrowers. He said the decision to make the form available in English and Spanish is going a long way to reach these communities.

Still, non-English speakers “have to go to the English website first, and that creates another barrier to application,” Martinez said. He added that he would like to see the government report the number and demographics of applicants each week so that promoters can target outreach to communities with smaller numbers.

A group of U.S. officials expressed a similar desire Friday when they asked Secretary of Education Miguel Cardona to ensure racial justice is at the forefront of student debt relief programs by targeting historically black colleges and universities.

Supporters see the debt relief plan as a positive step, they intend to keep striving for more. Timmy Sullivan, who runs the Public Higher Education Network of Massachusetts, which campaigns for a debt-free public college, said he will continue to campaign for cancellation all student debt.

“There is a philosophical and moral question: should we send people into debt for the right to learn? And my answer would be no,” he said. “The way we rectify the fact that we have forced generations to incur enormous debt to access their education is through debt forgiveness across the board.”

Material from the Associated Press is used in this report.

Shannon Coan can be reached at [email protected] Follow her on Twitter @shannonccoan. Jim Puzzanghera can be reached at [email protected] Follow him on Twitter: @JimPuzzanghera.


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