White House urges borrowers to apply for student debt relief despite court order

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The Biden administration is urging student loan borrowers to continue applying for debt relief despite a federal appeals court order late on Friday that temporarily halted this program.

“[This] temporary order does not prevent borrowers from applying for student debt relief,” White House press secretary Karine Jean-Pierre said in a statement following the eighth circuit court of appeals’ temporary stay.

Appeals court temporarily halts Biden’s student debt cancellation schemeRead more

This temporary stay mandates that Biden’s administration not act on the program while it weighs a legal challenge. The appeals court’s decision stems from a motion brought by six Republican-led states which are seeking to block Biden’s program.

Jean-Pierre said administration officials “encourage eligible borrowers to join” the approximately 22 million people who have already submitted information to the US department of education. The temporary stay “does not prevent us from reviewing these applications and preparing them for transmission to loan servicers”, Jean-Pierre’s statement also said.

Biden’s plan, which he announced in August, would cancel $10,000 in student loan debt for borrowers earning less than $125,000, or households with under $250,000 in income. Borrowers who received Pell Grants – which are normally for students who show greater financial need – would receive an additional $10,000 in debt relief.

Under Biden’s plan, 43 million borrowers qualify for some debt relief. Of the borrowers who are eligible, 20 million could see their debt forgiven entirely, the White House has said.

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Biden’s debt relief plan has quickly turned into a political flashpoint in advance of November’s midterm elections. Conservatives have contended that Biden exceeded his authority in taking such a massive action without obtaining congressional approval.

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Republicans and business group-backed opponents have argued that it’s an unfair government handout for relatively affluent persons, funded by taxpayers who didn’t seek higher education. Many Democrats battling difficult reelection races have distanced themselves from Biden’s student debt relief efforts.

These six states whose legal challenge prompted the Eighth Circuit’s temporary stay – Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina – filed suit in September. The Biden administration’s attorneys contend that the Department of Education has “broad authority to manage the federal student financial aid programs”.

The Department of Education argued in court that the 2003 Higher Education Relief Opportunities for Students Act, or Heroes Act, permits the education secretary to waive or change terms of federal student loans during war times or another national emergency. “Covid-19 is such an emergency,” they said.

Other legal challenges too are seeking to halt the program. Supreme court justice Amy Coney Barrett on Thursday rejected a Wisconsin taxpayers group’s efforts to stop the initiative.

Jean-Pierre emphasized that the temporary stay does not change the fact that a lower court had dismissed these six states’ case, nor does it indicate that their litigation has merit. The temporary stay “merely prevents debt from being discharged until the court makes a decision”.

“We will continue to move full speed ahead in our preparations in compliance with this order,” Jean-Pierre said. “And the administration will continue to fight Republican officials suing to block our efforts to provide relief to working families.”

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