Biden Admin Stops Taking Applications For Student Loan Forgiveness
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- Federal Student Aid has been accepting applications for federal student loan debt cancellation since mid-October.
- Millions of applications have already been processed and sent to loan servicers.
- President Biden’s administration, however, has been barred from carrying out any loan discharges.
Student loan borrowers can no longer apply to have up to $20,000 in debt forgiven – at least for now.
President Joe Biden’s federal student debt forgiveness program is on pause after Judge Mark Pittman of the U.S. District Court for the Northern District of Texas on Thursday vacated the president's plan.
“Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications,” reads a message on the website that previously housed the application. “We are seeking to overturn those orders.”
FSA stopped taking applications on Friday, less than a day after Pittman's ruling.
It started taking applications on Oct. 17 and had continued to accept applications after the 8th U.S. Circuit Court of Appeals issued an Oct. 21 stay blocking the administration’s ability to carry out the program. That stay was meant to be temporary until the court could fully consider the appeal of a case brought by six Republican-led states that had already been thrown out by a federal judge in Missouri.
The Department of Justice filed an appeal to the Texas court's decision within hours.
The Department of Education (ED) may not be accepting applications, but it appears the department made significant progress with submitted applications before the pause.
More than 26 million borrowers had applied for debt cancellation, while 16 million applications had already been approved and sent to loan servicers to be discharged if and when the courts allow it, ED Secretary Miguel Cardona said on Thursday.
“We are disappointed in the decision of the Texas court to block loan relief moving forward,” he said in a statement. “Amidst efforts to block our debt relief program, we are not standing down.”
Biden’s debt forgiveness plan would wipe out up to $20,000 in debt per borrower making less than $125,000 per year. Those who did not receive a Pell Grant while in school can have up to $10,000 discharged.
ED launched the application in mid-October.