The student loan forgiveness plan of the Biden administration is still on hold after the 5th US Circuit Court of Appeals denied a request from the federal government to temporarily reverse a lower court order that blocked the rollout of the plan.
The plan will remain on hold while the administration appeals a decision from a Texas judge who has declared the debt relief proposal unconstitutional, a three-judge panel of the New Orleans-based appeals court rejected the request in a brief order.
The Biden administration will now turn to the US Supreme Court to seek a reversal of the 5th Circuit decision, according to a court filing from the government in a separate legal challenge to the plan. The White House did not make any immediate comment on Wednesday s ruling.
The proposal is about to go through a legal battle and the government has stopped collecting applications for relief.
The order comes in a case brought up by the Job Creators Network Foundation, a conservative advocacy group, on behalf of two Texas borrowers who claim their education debt was unfairly excluded from the program.
In a lawsuit, six GOP-led states are asking the Supreme Court to keep the plan on hold while their legal challenge proceeds. State officials argue that the president overstepped his executive authority by authorizing the program without congressional approval and that it will negatively affect local loan servicers.
The plan would forgive up to $20,000 in federal student loans for eligible borrowers making less than $125,000 per year or $250,000 for households. Around 26 million people had requested forgiveness before the Department of Education stopped accepting applications.
With help from Josh Wingrove and Greg Stohr.
Debt costs are not going to go up any time soon.