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Biden student loan relief plan remains halted by 5th Circuit Court : NPR


President Joe Biden answers questions with Education Secretary Miguel Cardona in October as they leave an event about the student loan forgiveness portal.

Susan Walsh/AP


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Susan Walsh/AP


President Joe Biden answers questions with Education Secretary Miguel Cardona in October as they leave an event about the student loan forgiveness portal.

Susan Walsh/AP

Another appeals court rejected President Biden’s offer to reinstate his student debt plan on Wednesday, marking the latest legal setback in the administration’s bid to clear up to $20,000 in debt. .

In 5th District Court, the U.S. Department of Education requested a postponement of the November decision in which a federal judge in Texas ruled the loan program illegal and rescinded the debt forgiveness program. . Judge Mark T. Pittman, who was appointed by former President Donald Trump, wrote that the program was a “total usurpation” of congressional power by the executive branch. The appeals court’s decision upheld Pittman’s order while the court ruled more fully on the administration’s appeal.

The Biden administration has said it will eventually ask the Supreme Court to weigh in on the legality of the plan.

In the face of legal troubles, the Education Department approved about 16 million appsthose borrowers will see that debt paid off if and when the program overcomes regulatory hurdles.

Federal loan payments have been more or less paused since the COVID-19 pandemic began in early 2020, and the administration plans to stay that way as legal challenges to the bailout student loans take place. If the plan is allowed to continue or if a court orders a final stop on the plan, payments will resume after 60 days; otherwise, bills will begin to be due after June 30, 2023.

Biden’s plan to reduce up to $10,000 in federal student loans for low-to-moderate-income borrowers – up to $20,000 for eligible Pell Grant recipients – has encountered numerous legal hurdles. physical. Before the November ruling rescinding Biden’s student debt program, a federal appeals court in St. Louis has put the program on hold while it considers a separate lawsuit by six states challenging it.

Six states – Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina – argued that some state-based loan service companies that administer old federal loans, held privately, would financially harmed if borrowers are allowed to consolidate these loans and qualify for forgiveness.

That case was dismissed by a US district court judge in Missouri before the plaintiffs appealed to the 8th Circuit. which finally issued a nationwide debt forgiveness program ban.

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