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The Biden administration this week extended its pause on student loan payments through June 30, 2023, a decision the administration says will give the U.S. Supreme Court time to rule on an emergency appeal that asks the court to allow the program to move forward while litigation is pending.
The move comes as lower court rulings indicate a loan cancellation program in peril of being struck down.
In an emergency appeal last Friday, the U.S. Dept. of Justice asked the court to throw out an injunction issued by the St. Louis-based Eighth U.S. Circuit Court of Appeals that blocked the administration from forgiving debts while litigation is pending. According to the Wall Street Journal, that order came in a case brought by GOP officials in six states who claimed that the program was an unlawful exercise of presidential authority that would affect state revenues and tax receipts.
U.S. Solicitor General Elizabeth Prelogar wrote in the government’s filing, “The Eighth Circuit’s erroneous injunction leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations."
In a statement on Wednesday, Delegate to Congress Stacey Plaskett commended the Biden administration for its efforts. “I am grateful for the Biden-Harris Administration’s commitment to help middle-class federal student loan borrowers. I continue to remain hopeful that the courts will permit the U.S. Department of Education to implement the student debt relief program and allow us to make a significant step forward in the recovery of our nation," she said.
Though the Supreme Court is not expected to give full consideration at this stage on whether the debt cancellation program is legal, the high court's decision on Mr. Biden's request could determine the fate of the program. For example, If the court leaves the program on hold while legal challenges move forward, it would remain inactive for several months. Ms. Prelogar said that if the court denies the administration's request, it should consider taking up the full matter now so as to address it before the end of the court's term in June.
States were given until Wednesday to file a response to the Biden administration's request.
According to local data provided by the Bryan administration, over 7,800 Virgin Islanders qualify for the program, while 4,700 borrowers in the territory are eligible for Pell Grant debt relief for which they are able to get up to $20,000 in debt cancellation. Non-Pell Grant recipients with loans held by the U.S. Department of Education are also eligible for up to $10,000 in debt cancellation.
