A federal court of appeals has temporarily blocked Biden's student loan debt relief plan
SCOTT SIMON, HOST:
A federal court of appeals says the Biden administration can't act on the president's plan to cancel billions of dollars in federal student loans. President announced the plan in August and cited it in his speech just hours before the court's order. It calls for forgiving up to $20,000 of student loans for qualifying borrowers. The administration could have begun processing the applications as soon as tomorrow. NPR education reporter Sequoia Carrillo joins us.
Thanks so much for being with us.
SEQUOIA CARRILLO, BYLINE: Thanks for having me.
SIMON: Why is this program in a courtroom in the first place?
CARRILLO: So this is the case experts have been watching in this kind of tug of war we've been seeing between the White House and conservative groups around the country. There have been a handful of lawsuits that have aimed to stop this program before it really gets going. So far, legal experts have told me most don't cut it. They really aren't worried about many. But this case, filed by six pretty conservative states, was the one with the most potential to halt the program.
The states, including Arkansas and Missouri, are home to state-based loan companies that they argued would be hurt by debt cancellation. That's because these companies still manage some very old, federal student loans. So the state attorneys general are trying to prove that the debt relief program would mean less profit for those state-based agencies. But earlier this week, a judge dismissed the case, saying that the case did not have standing. So that just means the plaintiffs were unable to demonstrate concrete harm to these companies.
SIMON: Then help us understand why this ruling came down from the 8th Circuit Court of Appeals last night.
CARRILLO: So this ruling is not a full stop, by any means. This is a temporary hold while the appeals court gets briefed on the case. I spoke to some past sources in the immediate aftermath of the decision, and they assured me this hold does not have anything to do with the merit of the case. It's a procedural hold rather than a ruling of any kind. So while this does put a pause on any immediate loan relief, this is not a fatal shot to the program, by any means.
SIMON: What happens next?
CARRILLO: So now we wait for the appeals court to get acquainted with the case and make their decision. It should be a pretty quick turnaround. We should know more by Monday or Tuesday. And if the court issues an injunction, then the pause is extended, and we wait some more. And if it dismisses the case, then the program is back on track to begin any day now.
SIMON: And the program was getting under way, wasn't it?
CARRILLO: Yes. We've known the details for a while, since August, but the application officially opened this week. But it was already pretty big. Yesterday, in a speech at Delaware State University, President Biden said more than 22 million borrowers had already submitted applications, which is a huge number. That's more than half of all qualifying borrowers. And the administration had said they could start changing loan balances as early as Sunday. So that is now on hold. And borrowers just have to wait.
SIMON: Is there something people who have student loan debt should be doing right now?
CARRILLO: So last night, education secretary Miguel Cardona issued a statement saying the court order does not prevent the administration from reviewing the millions of applications they've received. In his words, they're moving full speed ahead to be ready to deliver relief to borrowers who need the help. He encouraged Americans to continue to apply. So if you've already applied for forgiveness, you've kind of done all you can. If you haven't applied yet, the application is still very much open on studentaid.gov/debtrelief. And it takes less than five minutes, so may as well fill it out if you qualify.
SIMON: NPR education reporter Sequoia Carrillo, thanks so much for being with us.
CARRILLO: Thanks. Transcript provided by NPR, Copyright NPR.