Student loan forgiveness request withdrawn after court ruling, borrowers left in limbo

The Department of Education has closed the application allowing borrowers to apply for President Biden’s unique student loan forgiveness initiative. A federal court canceled the program as illegal, putting the plan in grave danger.

Court strikes down Biden’s student loan forgiveness plan

A federal court based in Texas ruled Thursday that Biden’s sweeping student loan forgiveness plan is illegal. Biden’s one-time debt cancellation initiative would have provided $10,000 or more in student loan forgiveness to tens of millions of borrowers who met loan and income eligibility criteria.

The federal judge, appointed by Trump, ruled that Biden’s plan was “an unconstitutional exercise of congressional legislative power.” He declared the program illegal and blocked its implementation.

Republican leaders welcomed the court’s decision. “Yet another nail has been added to the coffin of President Biden’s illegal student loan bailout,” Rep. Virginia Foxx (R-NC), Republican leader of the Education and Labor Committee, said Friday.

Biden administration suspends application for student loan forgiveness

In response to the court’s decision, the Biden administration suspended the request for loan forgiveness under the initiative indefinitely.

“The courts have issued orders blocking our student debt relief program. Therefore, at this time, we are not accepting applications,” read one. message on app site.

The paper application and the online application are no longer available for borrowers who have not yet applied.

The Department of Education will retain submitted student loan forgiveness applications while it appeals

President Biden said last week that 26 million borrowers had already applied for student loan forgiveness. The Department of Education continued to accept applications even as another federal court blocked implementation of the program following an appeal associated with a separate legal challenge.

The Department of Education is appealing yesterday’s Texas court ruling, and officials said the department will retain student loan forgiveness applications that have already been submitted. But those borrowers will effectively remain in limbo for the time being.

“If you have already applied, we will hold your application,” reads a message on the application website. The Department of Education offers borrowers the opportunity to subscribe for updates so they can be notified if and when the program can resume.

“For the 26 million borrowers who have already provided the Ministry of Education with the information needed to be considered for debt relief – 16 million of whom have already been approved for debt relief – the Ministry will retain their information so that we can quickly process their relief once we prevail in court,” White House press secretary Karine Jean-Pierre said in a statement.

Cancellation of the court’s decision on appeal may be a uphill battle for the Biden administration, but officials project resolve.

“We will never stop fighting for the American workers who need them most – no matter how many roadblocks our adversaries and vested interests try to put in our way,” Jean-Pierre said.

Further Reading on Student Loan Forgiveness

Biden’s student loan forgiveness plan is in jeopardy

What the Election Results Mean for Student Loan Cancellation: 4 Key Takeaways

Can you apply for multiple student loan forgiveness programs? Yes – with some caveats

A new, bigger student loan forgiveness initiative is about to be launched – and it’s not what you think

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