Student loan borrowers seeking debt relief in limbo after legal setback
BOSTON - A federal judge's ruling has effectively stopped President Joe Biden's Student Loan Debt Relief initiative in its tracks.
The lawsuit, filed by the conservative Job Creators Network Foundation, is on behalf of two federal student loan borrowers who believe they were unfairly excluded from being eligible for debt relief.
A judge in Texas ordered a stop to the program, which as of Friday was no longer accepting applications online.
AJ Hernandez graduated from Boston College in 2015 and said he has been paying his federal and private loans ever since. "How long is it going to remain paused? What happens if it's paused indefinitely through the end of the year," asked Hernandez.
The 29-year-old said he went to apply for the loan forgiveness only to find the government's website had closed the application portal. "I was just really surprised they were not accepting applications at all anymore," he said. "And the fact that it is paused right now, and I don't know when that is going to be taken off of a pause makes me a little bit anxious."
The president's plan would allow federal borrowers to receive $10,000 in forgiveness, or up to $20,000 for those who received Pell Grants. The program limited eligibility to those making under $125,000 a year.
The Department of Education said roughly 38 million Americans were eligible for the loan relief. As of Friday, the department said 26 million people had already applied for the relief and 16 million people had been approved. The department said no refunds had been issued.
Adam Minsky is a student loan attorney in New England.
"For those who have submitted applications the education department says it will hold those applications as they continue the appeals process," said Minsky. "No one has received loan forgiveness under this initiative so far, but there are other programs out there that borrowers can qualify for."
Minsky said the White House had appealed Thursday's decision. The case will likely head to the 5th Circuit Appeals before heading to the Supreme Court.
A prospect that leaves borrowers like Hernandez hanging in the balance. "I would have so much money to invest in my future financially if I wasn't making these huge payments every month on my loans," Hernandez said.