US Judge Temporarily Blocks Biden’s Federal Student Loan Forgiveness Initiative

US President Joe Biden announced in August that he would cancel $10,000 in student loan debt for those making less than $125,000 annually, or for households making less than $250,000. Pell Grant recipients, who inherently exhibit more financial need, would qualify for $20,000 in debt forgiveness.

A federal appeals court issued an administrative stay on Friday temporarily blocking President Joe Biden’s plan to cancel what could amount to billions of dollars in federal student loans, according to reports. The court’s edict could throw the program into limbo only days after students started applying for forgiveness.

It is currently unclear what the decision means for the nearly 22 million borrowers who have already applied for relief, but White House Press Secretary Karine Jean-Pierre encouraged borrowers to continue applying for aid while things are sorted out, as the court’s temporary order does not prevent applications or their review.

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

It is unclear if the issue will be resolved before the start of 2023, when payments on federal student loans are expected to resume after they were paused due to the COVID-19 pandemic.

Biden has said that his most recent extension of the payment pause would be the last, but some economists are concerned that some Americans may not have regained financial footing after the pandemic, and there are fears that they could fall behind on payments.

An appeal was filed in the 8th US Circuit Court of Appeals in St. Louis on Thursday evening, after US District Judge Henry Autrey ruled that ”since the states of Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina failed to establish standing, the Court lacks jurisdiction to hear this case.”

According to reports, the six states also asked the court for an injunction prohibiting the administration from implementing the debt cancellation until the appeals process goes through.

Biden had announced earlier on Friday that nearly 22 million borrowers had submitted applications for the debt relief program – which amounts to nearly half of the 40 million eligible Americans who the Education Department expects will qualify for loan forgiveness.