White House urges borrowers to defy court order to apply for student debt relief under Biden administration

The Biden administration is urging student loan borrowers to keep applying for debt relief, despite an order late Friday by a federal appeals court that temporarily halted the program.

“[This] The interim order does not prevent borrowers from applying for student debt relief,” White House press secretary Karin Jean-Pierre said in a statement after the 8th Circuit Court of Appeals interim stay.

The temporary stop requires the Biden administration not to act on the plan as it weighs legal challenges. The appeals court’s decision stems from a motion filed by six Republican-led states that are trying to block Biden’s plan.

Jean-Pierre said government officials “encouraged eligible borrowers to join” the roughly 22 million people who have submitted information to the U.S. Department of Education. Jean-Pierre’s statement also said the temporary stay “will not prevent us from reviewing these applications and preparing them for transmission to loan servicers”.

Biden’s plan announced in August would cancel $10,000 of student loan debt for borrowers earning less than $125,000 a year or households earning less than $250,000. Borrowers who receive Pell Grants—usually for students who demonstrate greater financial need—will receive an additional $10,000 in debt relief.

Under Biden’s plan, 43 million borrowers are eligible for partial debt relief. The White House said 20 million of the eligible borrowers could have their debts fully forgiven.

Biden’s debt relief plan quickly turned into a political hot spot ahead of November’s midterm elections. Conservatives believe that Biden is beyond his authority by taking such a massive action without congressional approval.

Opponents backed by Republicans and business groups see it as an unfair government handout to the relatively wealthy, funded by taxpayers who do not seek higher education. Many Democrats battling a tough re-election campaign have moved away from Biden’s student debt relief efforts.

The legal challenges in those six states prompted the Eighth Circuit temporary stay — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — to file the case in September. Lawyers for the Biden administration have argued that the Education Department has “broad authority to administer federal student financial aid programs.”

The Department of Education argued in court that the Student Higher Education Relief Opportunity Act of 2003, or the Heroes Act, allows the Secretary of Education to waive or change the terms of federal student loans in times of war or other national emergencies. “Covid-19 is such an emergency,” they said.

Other legal challenges are also seeking to halt the scheme. Supreme Court Justice Amy Coney Barrett on Thursday rejected efforts by Wisconsin taxpayer groups to block the initiative.

Jean-Pierre stressed that the temporary stay doesn’t change the fact that the lower court dismissed the six states’ cases, nor does it show that their lawsuits are warranted. The temporary stay “just prevents the debt from being discharged pending a court decision”.

“We will continue to press ahead with our preparations at full speed in accordance with this order,” Jean-Pierre said. “The administration will continue to fight Republican officials who try to prevent us from providing relief to working families.”

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