Biden Administration Suspends Student Loan Forgiveness Applications

Topline

The Biden administration will stop accepting applications for federal student loan forgiveness, according to a note on the official application website, after a Texas court struck it down and deemed the program an “unconstitutional exercise” Thursday.

The student debt relief program was struck down in Texas Thursday.

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Key Facts

“Courts have issued orders blocking our student debt relief program,” the Federal Student Aid website now reads, adding they are not accepting applications while the administration seeks to overturn the Texas decision.

Miguel Cardona, the U.S. Secretary of Education, announced the Department of Justice has already appealed the Texas ruling in a statement Friday.

Judge Mark Pittman ruled in favor of the conservative group Job Creators Network Foundation, which filed a lawsuit against the program on behalf of two student loan borrowers.

An October decision by the 8th Circuit Court of Appeals had already temporarily halted the program after a request from a group of Republican attorneys general.

Chief Critic

“No one can plausibly deny that it is either one of the largest delegations of legislative power to the executive branch, or one of the largest exercises of legislative power without congressional authority in the history of the United States,” Pittman wrote in his decision blocking the student loan program.

Crucal Quote

“We remain committed to taking other actions to fix longstanding issues in the student loan forgiveness system and hold schools accountable for leaving students with mountains of debt and without the skills and preparation to find good jobs,” Cardona said in his statement. “We will never stop fighting for the millions of hardworking students and borrowers across the country.”

Big Number

26 million. That’s the number of people who have requested loan forgiveness, according to Cardona. Of those requested, 16 million have been approved.

Key Background

A decision to stop accepting applications for President Joe Biden’s loan relief program—which provides $10,000 in forgiveness to applicants who make less than $125,000 a year and an additional $10,000 to Pell Grant recipients—is another blow to one of his administration’s key programs. The White House has continued to argue the debt cancellation program is legal, as Cardona has the power to modify student loans during times of national emergency, like the Covid-19 pandemic. Republicans have continued to fight against the program, calling it a “short-sighted answer that would crush American taxpayers.”