Anna Moneymaker/Getty Images
There is a federal appeals court Temporarily blocked President Biden’s Student Loan Forgiveness Plan – Stops any debt from being wiped out. But the administration continues to encourage people to submit applications.
The verdict comes on Friday evening within a week from the application portal went live. Already, nearly 22 million people — more than half of eligible borrowers — have signed up. The administration may consider the applications from Sunday and transfer the loan balances.
“This order does not change the trial court’s dismissal of the case, nor does it suggest that the case has merit,” White House press secretary Karine Jean-Pierre said. A statement Friday evening. “It prevents the debt from being discharged until the court makes a decision.”
The ban was imposed by the U.S. Eighth Circuit Court of Appeals, which is considering a motion by six Republican-led states to halt the plan. It is one of several lawsuits aimed at challenging the plan.
Earlier this week, Supreme Court Justice Amy Coney Barrett Rejected similar attempts From the Wisconsin Taxpayers Group.
What happened in the court case?
Six states — Arkansas, Missouri, Nebraska, Iowa, Kansas and South Carolina — filed a lawsuit arguing that the federal relief program would affect state-based credit unions that administer some federal loans themselves.
Earlier this week, a federal judge Dismissed the case, said it had no standing. The group later appealed and asked a federal appeals court to temporarily halt the plan while the appeals court reviews the case.
For those who haven’t applied yet, what should I do now?
The Application at studentaid.gov is open. Jean-Pierre said the temporary order will not prevent borrowers from applying for relief and encouraged eligible borrowers to do so if they have not already done so.
What will happen to those who have already applied for loan waiver?
According to Jean-Pierre, the court ruling does not stop the federal government from reviewing applications or preparing documents for lenders.
“We are moving full speed ahead to be ready to provide relief to borrowers,” Education Secretary Miguel Cardona said. said.
“Today’s tentative decision will not stop the Biden administration’s efforts to give borrowers the opportunity to apply for debt relief, nor will it prevent us from reviewing the millions of applications we have received,” he said.
How long does a court order last?
One of two things could happen in the coming days: either the court could issue an injunction and the suspension would last longer, or the case could be dismissed and the program could continue.
A federal appeals court is expected to announce a ruling early next week.
NPR’s Sequoia Carrillo contributed reporting.