Application for student loan forgiveness closed after court ruling

By on November 11, 2022 0

A district judge ruled Biden’s debt relief plan unconstitutional in Brown v. Department of Education. The administration is appealing the decision.

President Joe Biden announced his administration’s plan for widespread student loan forgiveness in late August. Under this planned program, the Ministry of Education would forgive $10,000 of student debt for anyone earning less than $125,000 a year and $20,000 of student debt for people under this annual income limit who have received Pell grants.

In October, applications to receive this $10,000 or $20,000 in student debt relief opened. Although the administration did not give a specific timetable for when it would cancel the loans, it said the pause in loan repayments would end in January 2023.

An earlier court order suspended the program, but only while an appeals judge considered the merits of a lawsuit against the administration. At that time, the application remained open. But now people claim The app has been closed.

THE QUESTION

Did the Biden administration withdraw the request for student loan forgiveness after a court ruling?

THE SOURCES

THE ANSWER

Yes, the Biden administration withdrew the request for student loan forgiveness after a court ruling.

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WHAT WE FOUND

On November 10, 2022, a U.S. District Court judge in Texas sided with plaintiffs in Brown v. US Department of Education, a lawsuit in which the plaintiffs sought an end to the student loan forgiveness program. The plaintiffs allege that the Department of Education unlawfully ignored the notice and comment requirement of the Administrative Procedure Act, which requires federal agencies to solicit public comment before making rules.

The judge blocked the pardon program after declaring it “illegal”.

On November 11, 2022, the Student Loan Forgiveness Program application form was withdrawn.

“Courts have issued orders blocking our student debt relief program,” the application form webpage read Nov. 11. “As a result, at this time we are not accepting applications. We seek to rescind these orders.

This is different from the November 10 post, when the app was still available.

“Following a court order, we are temporarily prevented from processing debt discharges,” read the Nov. 10 notice, with the request still open below. “We encourage you to apply if you are eligible. We will continue to review applications. We’ll process releases quickly when we’re able to and you won’t need to re-apply.

More CHECK: Yes, court order suspended Biden’s student loan forgiveness program

The change between November 10 and November 11 is also reflected on the Student Debt Relief information page. The Department of Education has indicated it will retain applications from people who have already applied, while the Biden administration seeks to appeal.

Prior to the latest decision, the debt release was only temporarily suspended while a judge considered a decision on another lawsuit. Since October 20, the United States Court of Appeals for the Eighth Circuit has considered an appeal in State of Nebraska v. Biden, a lawsuit in which six state attorneys general say the pardon program would cause financial harm to their state, after a district court sided with the Biden administration. On Oct. 24, the appeals court ordered a stay barring the Biden administration from paying any student debt under its plan while the court considers the appeal.

In Brown v. U.S. Department of Education, the district court opposed the administration and the pardon program, stating that the administration’s program “is an unconstitutional exercise of the legislative power of Congress” that “must be struck down.”

The Department of Education filed an appeal, which would take the case to the Fifth Circuit Court of Appeals. There, a judge will uphold the lower court’s decision, leaving the program vacant, or overturn the decision and lift the blocking of the program. Whatever decision the court makes, it is likely that the lawsuit will then be appealed to the Supreme Court. If the Supreme Court refuses to rule on the case, the decision rendered by the Court of Appeal will be final.

Even if the Fifth Circuit quickly sides with the administration, the Department of Education will not be able to pay its debt under the program until all court orders temporarily blocking the program or canceling it entirely will not be lifted. Currently, the temporary stay issued by the judge in State of Nebraska v. Biden is the only other court order blocking the program.

More CHECK: Quick Facts About Student Loan Forgiveness

More CHECK: Yes, a change to the Student Loan Forgiveness Plan excludes some borrowers from relief

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