Biden’s student debt relief plan temporarily stalled. Here’s what you need to know.

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On Friday, President Biden speaks about student debt relief at Delaware State University in Dover.

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A federal appeals court has temporarily blocked President Biden’s student loan forgiveness plan, preventing any debt from being written off. But the administration encourages people to keep submitting their applications.

The Friday evening decision comes less than a week since the application portal went live. Already, nearly 22 million people – more than half of eligible borrowers – have signed up. The administration could have started processing applications and changing loan balances from Sunday.

“The order does not reverse the dismissal of the case by the trial court, nor does it suggest that the case has merit,” White House press secretary Karine Jean-Pierre said in a statement. a press release on Friday evening. “It simply prevents the debt from being discharged until the court makes a decision.”

The block was issued by the United States Court of Appeals for the Eighth Circuit, which is considering a petition from six Republican-led states to stop the program. This is one of many lawsuits seeking to challenge the program.

Earlier this week, Supreme Court Justice Amy Coney Barrett dismissed similar efforts by a Wisconsin taxpayer group.

What happened in the court case?

Six states – Arkansas, Missouri, Nebraska, Iowa, Kansas and South Carolina – have filed a lawsuit arguing the federal relief package would hurt state-based loan companies who manage certain federal loans themselves.

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Earlier this week, a federal judge dismissed the case, saying she lacked standing. The group then appealed and asked a federal appeals court to temporarily suspend the program while the appeals court considers the case.

For those who haven’t applied yet, what should they do now?

Application on studentaid.gov remains open. Jean-Pierre said the temporary order does not prevent borrowers from seeking relief and she encouraged eligible borrowers to do so if they have not already done so.

What will happen to people who have already applied for debt cancellation?

According to Jean-Pierre, the court’s decision does not prevent the federal government from reviewing applications or preparing documents for loan servicers.

“We are moving full speed ahead to be ready to relieve borrowers,” Education Secretary Miguel Cardona said. said.

“Today’s temporary decision does not stop the Biden administration’s efforts to provide borrowers with the opportunity to apply for debt relief, nor does it prevent us from reviewing the millions of applications we have. received,” he said.

How long will the legal blockage last?

One of two things can happen in the coming days: either the court can issue an injunction and the break will last longer, or it can dismiss the case and the program can continue.

The federal appeals court is expected to announce a decision early next week.

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