Ever since the announcement of the federal student loan relief program, the Biden administration has been facing a slew of legal challenges by conservative states. Six GOP-led states filed a complaint alleging that the program was an illegal use of authority, and that the policy would have negative economic impacts on their states. Last Thursday, a federal judge ruled that the states did not have the standing to sue as they failed to prove that the policy directly harms them, stating that the claims were too speculative. The states quickly appealed the decision and on Friday, the 8th Circuit Court of Appeals issued a temporary stay that bars the administration from granting student loan relief until the court officially rules on the request to block the policy.
The temporary stay does not stop eligible borrowers from applying for relief nor does it stop the administration from reviewing applications, however the administration cannot officially forgive the debt until the decision is made. The administration has expressed confidence that the program will survive the legal challenges and that they will be able to proceed with forgiving debt for the almost 22 million people who have already submitted the application. The court is expected to act quickly on this case but it is unclear how potential future legal challenges may impact the program – in the meantime borrowers are encouraged to keep submitting their applications. The office will continue to monitor and provide updates on the program and potential legal challenges as they unfold. More information can be found here and the application can be found here.