Biden’s student debt relief plan blocked by judge: What to know in New Jersey

NEW JERSEY – A Texas federal judge has overturned President Joe Biden’s ruling student loan forgiveness program Thursday, putting New Jersey residents among more than 26 million people who have sought relief deeper in limbo.

For now, the the application process is suspendedaccording to a note on the studentaid.gov website. In New Jersey, about 1.08 million people are eligible to apply, including 590,000 recipients of Pell Grants – a federal program for students with greater financial need.

“If you have already applied, we will keep your application open,” the note said, adding that updates will be posted on the website as they become available.

For Pell Grant borrowers, the program would forgive up to $20,000 in student loan debt. Other borrowers could see up to $10,000 of their debt forgiven if they earn less than $125,000 ($250,000 for married couples) per year.

It remains to be seen whether New Jersey borrowers will have to resume payments on January 1, when the pause caused by COVID-19 is expected to expire. Economists fear that if aid is not available, people who have not rebounded financially from the pandemic will fail to repay their loans.

The Justice Department has filed an appeal, White House press secretary Karine Jean-Pierre said Thursday.

“The president and this administration are committed to helping working and middle-class Americans get back on their feet, while our adversaries — backed by extreme Republican special interests — have taken legal action to stop millions of Americans to get much-needed help,” Jean-Pierre said in a statement.

The program had been on hold since October 21, when the United States Court of Appeals for the 8th Circuit granted a administrative staytemporarily suspending the program while considering an injunction sought by six Republican-led states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — to block it.

He added: “The Court is not blind to the current political division in our country. But it is fundamental to the survival of our Republic that the separation of powers as set forth in our Constitution be preserved.”

The Associated Press contributed reporting.

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