Biden could have 'Plan B' if a court stalls student debt forgiveness — more repa...
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Biden could have 'Plan B' if court stalls student debt forgiveness — more repayment delays
On Jan. 1, a temporary pause on federal student loan repayments is set to expire — meaning millions of borrowers are bracing to repay loans after a nearly three-year reprieve.
While the Biden administration called the latest extension the "final" one, some experts predict the pause could be extended if the legal uncertainty over a new student loan forgiveness plan continues.
On Friday, hours after President Joe Biden announced that 22 million people had applied for forgiveness, a federal court of appeals issued an administrative stay that bars the administration from dispensing with the loans while it considers a challenge to the program.
White House Press Secretary Karine Jean-Pierre declined to discuss the possibility of extending the repayment pause, but she also didn't rule it out when reporters raised questions on Monday.
“I'm not going to get into hypotheticals, and we have to let the process play out,” she said. “We're not going to get ahead of ourselves from here.”
In August, the Biden administration announced a plan that would forgive $10,000 of student debt for people making less than $125,000 and an additional $10,000 for those who received Pell Grants, which go to borrowers with extreme financial need. The plan has sparked opposition from Biden's opponents, who contend it's too expensive and oversteps Biden's authority. Others contend it doesn't address the root problems that make college so expensive. The plan has sparked several legal challenges.
The U.S. Court of Appeals for the Eighth Circuit is expected to rule on a suit from six Republican-led states aiming to block the program permanently after a lower court dismissed the suit for lack of standing — meaning a judge found the states didn't show that the forgiveness plan hurt them.
“It’s very important that the legal issues involving presidential power be analyzed by the court before transferring over $400 billion in debt to American taxpayers,” Nebraska's Republican Attorney General Doug Peterson said in a statement after the appeals court stayed Biden's plan.
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