On November 10, Texas federal court judge Mark Pittman suspended the execution of the Biden administration’s student loan forgiveness program and said that the scheme to provide loan holders up to $20,000 in relief money was illegal.
Only a few days before millions of Americans were anticipated to get their first round of payments and just before loan repayments were set to begin in January 2023, the decision was taken, which also led StudentAid.gov to withdraw the application.
Student Loan Forgiveness Plan Halted
Given the most recent incident, President Joe Biden will likely announce another suspension of repayments before the deadline of December 31.
To finally terminate student loan payment restrictions that had been continually extended throughout the pandemic was one of Biden’s goals for the student debt relief package, which was first revealed in August.
By providing roughly 45 million qualifying debtors with relief funds, $10,000 for the majority of applicants, and $20,000 for low-income Pell Grant recipients, the goal was to remove a significant portion of outstanding debts while making monthly payments more tolerable when they did eventually begin.
However, since that funding has already been halted, Biden could feel compelled to act and announce a new delay in payments if pressure from advocacy groups intensifies. The start of next year, when student loan payments are anticipated to resume, maybe the earliest that Biden’s debt relief is put into effect. Advocacy groups claim it is impossible.
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Student Loan Debt Repay
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Persis Yu, deputy executive director of the Student Borrower Protection Center, said last week that the Biden administration “cannot now begin payments on January 1st. It must use all of its resources to struggling to assure that students receive the debt relief they need.”
The government also announced the “final” extension of the suspension of student loan payments until December 31 in addition to the complete student loan forgiveness that was announced in August. The government reminded homeowners that the goal was to have their relief authorized before payments started, so advocates are confident that borrowers won’t be pushed into payback too early.
The US Department of Education did not address continuing the payment freeze but stated that it was “committed to taking further measures to rectify long-standing inadequacies in the student loan forgiveness system.”
Since the Biden administration is contesting the judgment, the 5th Circuit Court of Appeals will consider the case. Additionally, other pending lawsuits concern the borrowers.
A temporary nationwide prohibition on forgiving was issued by the 8th US Circuit Court of Appeals in St. Louis in response to a lawsuit from six Republican-led states.
The US Supreme Court might decide on both cases, delaying the program for a few more weeks or months. The Supreme Court has previously consistently rejected the remedial plan. But more suits keep coming in.
Since the student loan forgiveness application started on October 17, nearly 26 million people had filed petitions for relief before the administration was forced to stop accepting applications last week. More than 16 million of them had been granted.