Debt Relief Blocked, for Now

Inside Higher Ed

Katherine Knott

October 24, 2022

The Biden administration is encouraging borrowers to keep applying for student loan forgiveness despite a temporary stay issued by a federal appeals court Friday night that blocked the administration from discharging any debt.

The U.S. Court of Appeals for the Eighth Circuit, which granted the request for an emergency stay from six Republican-led states, will hear the challenge on an expedited timeline with briefs due today and tomorrow.

In a video posted to Twitter, Education Secretary Miguel Cardona said the legal challenges to the student debt–relief plan are “baseless” and that the administration was not deterred. He also defended the plan in an op-ed published over the weekend in USA Today, noting that the stay doesn’t prevent the administration from reviewing applications for forgiveness.

“Amidst Republicans’ efforts to block our debt relief program, we are moving full speed ahead to be ready to deliver relief to borrowers who need the help,” Cardona said in a statement. “As we continue our preparations in compliance with this order, we continue to encourage working- and middle-class Americans to apply for debt relief at studentaid.gov. President Biden and this administration are committed to fighting for the millions of hardworking students and borrowers across the country.”

The emergency stay comes after the Biden administration thwarted several legal challenges. A federal district judge dismissed the lawsuit from the Republican-led states because the plaintiffs lacked standing to sue. The plaintiffs quickly appealed to the Eighth Circuit.

Nearly 22 million people have applied for forgiveness in the week since the application opened, and that group will be among the first to see their student loan balances drop if the stay is lifted. The administration is forgiving up to $10,000 for Americans earning less than $125,000 and up to $20,000 for those who received a Pell Grant. The plan is expected to affect more than 40 million borrowers.

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