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Courts block student loan relief | What to know

The courts' rulings come less than two months before a COVID-era student loan repayment moratorium is set to end

ATLANTA — Millions of people, hoping at least some of their student debt would be canceled, could be in for a long wait. Rulings from a U.S. District judge in Texas and the 8th Circuit Court of Appeals in St. Louis may cause roadblocks for those looking for immediate relief. 

Evan Malbrough, who graduated from Georgia State University in 2020, used the HOPE scholarship, some money out of pocket and paid the rest of the way with $9,000 in federal student loans.

“When Joe Biden made the announcement that up to $10,000 in loans would be forgiven, I was elated," Malbrough said. "As a person who graduated during the pandemic, my economic prospects were definitely limited at the onset. It really helps, because that money can go to savings, investing and things like that.”

Georgia State University law professor Tanya Washington Hicks said the rationale behind blocking President Biden's student loan relief program is based on the judges' relief that the president was taking on a role that Congress would normally oversee. 

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"Both of these challenges have advanced the argument that President Biden doesn't have the authority to actually forgive student loan debt," Hicks said. "It’s usurping Congressional authority in that space, and that the plan is violative of separation of powers.”

However, the Biden Administration argues the pandemic presented an emergency so that relief was necessary. 

The White House sent a statement to 11Alive, saying: "We are confident in our legal authority for the student debt relief program and believe it is necessary to help borrowers most in need as they recover from the pandemic. The Administration will continue to fight these baseless lawsuits by Republican officials and special interests and will never stop fighting to support working and middle-class Americans.”

The Biden Administration is currently filing appeals, and Hicks said it's likely the cases ultimately go to the U.S. Supreme Court. For now, though, the government has paused the student loan forgiveness program and is no longer accepting applications. 

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"For students who were intending to apply or whose applications have not been completed, they’re in a vulnerable space, particularly students of color, because data shows that students of color are carrying more debt than other students and making less than other students," Hicks said. 

While some people have already gotten debt relief, several thousand have not yet completed the application. Hicks said they will have to wait until this case is resolved, even at the highest level, before taking advantage of the plan. The professor said it could take, at the earliest, several months, before a resolution is reached.

Meantime, Malbrough said the program could erase his debt altogether, plus he noted the Dec. 31 deadline when the COVID-era freeze on student loan repayments is set to end. For now, he and others' status of their student loan debt remains in limbo.

"These are our funds we’re getting back to help put back into the economy. I’ve been operating financially off this budget that accounted for the fact that student loans were frozen before," Malbrough said. "On top of that, my loans may potentially be forgiven. Now, I have to start considering and accounting for the fact there could be another few hundred dollars of bills on my account. They’re going to have to get paid. I would hope the administration extends the freeze on repayments until we’re able to figure out whether or not the loans will be forgiven through the initial method or if it’s going to be a bill in Congress.”

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