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US Government Stops Taking Debt Forgiveness Applications Following Court Ruling

Published: November 11, 2022
A graduating student waits for the start of the Commencement ceremony at the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts, on May 27, 2022. (Image: REUTERS/Brian Snyder)

The U.S. government has stopped accepting new applications for student debt relief, after a federal judge blocked President Joe Biden’s loan forgiveness plan, according to a notice on a government website.

A judge in Texas who was appointed by former President Donald Trump ruled on Thursday, Nov. 10 that Biden’s plan to cancel hundreds of billions of dollars in student loan debt was unlawful and must be vacated. While the Biden administration is appealing the ruling, it has stopped accepting new applications while the matter is disputed.

“Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications. We are seeking to overturn those orders. If you’ve already applied, we’ll hold your application,” the notice says.

About 26 million Americans have applied for student loan forgiveness, and the U.S. Department of Education has already approved requests from 16 million.

The appeal would be heard initially by a three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals, a court dominated by conservative judges who have stymied other Biden policies.

Of the court’s 16 active judges, only four were appointed by Democratic presidents. Trump appointed six of them.

White House Press Secretary Karine Jean-Pierre said on Nov. 10 that the department would hold onto application information “so it can quickly process their relief once we prevail in court.”

U.S. District Judge Mark Pittman, an appointee of former Republican President Donald Trump in Fort Worth, called the program an “unconstitutional exercise of Congress’s legislative power” by Biden as he ruled in favor of two borrowers backed by a conservative advocacy group.

The litigation could ultimately wind up at the U.S. Supreme Court. Conservative Justice Amy Coney Barrett has already turned back two requests to block the program in lawsuits out of Indiana and Wisconsin, two states she is assigned to assess emergency appeals from.

Reuters contributed to this report.