- For now, the federal government cannot accept any applications or discharge the debt of the 16 million people whose applications have been approved.
- With the program blocked, the Biden administration is unable to discharge any student loans until the lower court rules on an injunction request from the six states.
- Borrowers should expect to resume making payments in January.
A federal judge in Texas blocked President Joe Biden’s student loan forgiveness program on Thursday, declaring the program unlawful and putting millions of student-loan borrowers in further limbo.
U.S. District Judge Mark Pittman, an appointee of former Republican President Donald Trump, said the program is “unlawful.” The ruling is considered a victory for conservative opponents of the program.
The decision follows a lawsuit filed by the Job Creators Network Foundation, a conservative group, in October. The lawsuit was filed on behalf of two borrowers, Myra Brown and Alexander Taylor, who said they did not have a chance to provide feedback about the student debt forgiveness plan. The Biden administration has appealed to the Fifth U.S. Circuit Court of Appeals. It is largely staffed by appointees of conservative presidents, including six by Trump.
BLOCKED:US judge in Texas halts President Biden’s student debt forgiveness plan; appeal filed
In a separate legal challenge, the program was put on administrative hold after a federal appeals court halted the Biden administration from further acting on its student debt relief program.
Can I still apply for loan forgiveness?
No. At least for now, because of the district court’s action, the federal government cannot accept any applications or discharge the debt of the 16 million people whose applications have been approved.
With the program blocked, the Biden administration is unable to discharge any student loans until the lower court rules on an injunction request from the six states.
Legal limbo? Feds bet on changes to rules for another student debt relief option
When will student loans be forgiven?
Broad loan forgiveness may be dead unless Congress passes legislation allowing it or higher courts side with Biden.
The Biden administration initially hoped to begin forgiving debt by the end of this year, before a freeze on student loan payments expires Dec. 31. All of that is now in doubt.
Application for Biden’s student loan forgiveness available:Here’s what to know
When do you have to pay your student loans?
The pause on student loan payments was extended through Dec. 31 and is the final extension, according to the Biden administration.
That means borrowers should expect to resume making payments in January.
‘Full cancellation’:Federal student loan forgiveness could be taxed as income in some states
What happens if you can’t pay your student loans?
If you don’t make payments on federal or private student debt can hurt your personal finances.
Loans become delinquent after missed loan payments and each missed payment can also result in a late fee charge. Late payments can impact borrowers’ credit reports and bring down credit scores, making it difficult to be approved for credit cards, take out other types of loans or secure rental contracts.
Borrowers may also face having their wages garnished wage garnishment, including tax refunds and federal benefit payments, or other legal action due to missed payments.
USA TODAY
Source link