PHILADELPHIA (KYW Newsradio) — The Biden administration was dealt another legal setback to its student loan relief program: A federal appeals court on Wednesday rejected a proposal to restart the plan.
The decision came out of the 5th U.S. Circuit Court of Appeals. The panel, consisting of two Republican-appointed judges and one appointed by former President Barack Obama, did not reverse a Texas judge’s determination that the Biden administration’s plan was “unlawful.”
A lawsuit was previously filed by the conservative advocacy group Job Creators Network Foundation on behalf of two borrowers who said they were unfairly excluded from being eligible for relief.
“It’s a safe bet that the Biden administration will appeal this ruling to the Supreme Court,” said CBS News legal analyst Jessica Levinson. “The court is also considering a similar challenge to the program that started in the 8th Circuit.”
In that particular case, in a separate lawsuit, six GOP-run states challenged the president’s legal authority to institute such a plan to wipe out student debt.
Eligible borrowers would get up to $20,000 of their federal student loans forgiven. Around 26 million Americans applied and 16 million were approved, according to the Department of Education. Applications are not being accepted at this time as the administration deals with the legal challenges.
As this all plays out in the courts, the president once again extended the federal student loan payment pause to the end of June 2023. It was set to expire at the end of December, and borrowers were supposed to resume payments in January.
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