Borrowers' concerns about the student debt relief program are on hold

Mmillions of federal student loan borrowers worry about what will happen to the Biden administration’s student debt relief plan after A Texas court banned the program from moving forward for now.

At least 26 million people have applied for the program, which aims to cancel up to $20,000 of debt to an eligible borrower. In Friday, the assistance program announced on their website that they had stopped accepting applications due to the court ruling, but said they were works to “overturn these orders.Some borrowers are already concerned about whether the delays will continue and whether the promised debt relief will ever happen.

“I think it’s going to take a lot longer than we originally hoped, and it’s kind of overwhelming,” Emily Archer, a recent graduate student in health and nutrition at the University of Massachusetts Amherst, told TIME. “So many things are out of reach for our generation. Being able to accumulate wealth is just not part of my future.”

The Texas decision is the second major attempt to halt the program after a U.S. appeals court temporarily blocked the program last month to review a case from six Republican-led states. Other cases were mostly dismissed in court due to lack of standing.

The Department of Education’s student debt relief program was committed to beginning debt relief by Dec. 31, but has faced intense scrutiny and legal action from conservative opponents. Uncertainty about the outcomes and length of legal battles could derail the plans of those who have already applied for relief, as well as millions of others who are eligible.

The latest suit filed by Job Creators Network Foundationclaimed that the relief program violated the Administrative Procedure Act because the administration did not seek public comment on the plan, and U.S. District Judge Mark Pittman agreed that the plaintiffs were denied “due process rights.”

Some frustrated borrowers blame President Biden and his administration for not pushing hard enough to fulfill their campaign promise to relieve student debt. “I feel like they’re kind of succeeding. Maybe they can get away with not following this plan,” says Archer.

The Biden administration had already approved 16 million borrowers’ applications for debt relief before the ruling and said it would retain all applicant information to process the relief quickly “once we win in court.” Biden previously said he would not extend the student loan repayment pause again, but has not addressed the issue since Thursday’s ruling.

“I really hope it doesn’t fail because I’m not financially prepared if I have to resume loan payments in January,” Sarah Schobutt, a recent graduate of Rutgers University in Newark who studied political science and gender studies, told TIME. “I work two jobs just to make ends meet, pay rent and pay my groceries.”

The prospect of having to resume loan payments caught borrowers eagerly awaiting relief this summer caught off guard. Shobut applied to the program the week applications opened in October, and says it was “anxiety-inducing” not knowing what would happen.

“I have all these plans for my life and I can’t make them happen because I’m trying to be logical about what I can and can’t afford and my career prospects,” says Schobutt. Her goal of going to graduate school feels unattainable. “I don’t know how to prioritize that when everything is up in the air.”

If delays in student debt relief continue and loan payments resume, which is expected to happen in January 2023, the added monthly costs will be especially difficult for those who have experienced job loss, health problems or other spin-offs of the economic downturn from the pandemic.

Archer says she had to move back in with her parents during the pandemic and that many others in her life have also faced setbacks over the past few years. “Financially, it’s been a bit tough and I feel like we’re headed for a recession right now. The prices, the inflation rate this year has just gone up,” she says.

US inflation hit a 40-year high this summer.

“I feel like I have to choose where my money goes,” Archer added.

Shobut says, as is the case with many other BIPOC students, the cost of education has been a huge barrier for everyone in her family, who immigrated from Syria 10 years ago.

“We’re taught that you have to go to college; this is how you will improve your life. You’ll get that job after graduation and then you’ll achieve that American dream,” she says. “I don’t have that much student loan debt, but it’s certainly enough that I can’t afford it.”

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