The Department of Justice on Tuesday filed for a stay on one of two court orders blocking the Biden administration's student-debt relief program, arguing in documents that preventing the Department of Education from effectuating the debt relief "causes significant harm to" the approximately 40 million student loan borrowers eligible for debt relief.
District Judge Mark Pittman last week struck down the program, which would have provided borrowers with up to $20,000 in student loan relief, ruling it was "an unconstitutional exercise of Congress's legislative power."
The Biden administration immediately filed a notice to appeal with the 5th U.S. Circuit Court of Appeals.
The fate of the challenge could end up in the Supreme Court.
Secretary of Education Miguel Cardona, in court papers filed Tuesday in the U.S. District Court for the Northern District of Texas, said preventing the department from moving forward with the program also "causes significant confusion that will lead to further harm to borrowers."
"Most borrowers have been told that all they need to do is submit an application to obtain one-time student loan debt relief. Now, as a result of litigation they are left to wonder when, if at all, if debt relief will be effectuated.
"Despite the Department's efforts to keep borrowers informed, many borrowers may remain uncertain or confused about their repayment obligations.
"The group most at risk of default is the approximately 18 million borrowers eligible for one-time debt relief who would have their federal student loans discharged in their entirety under the program.
"These student loan borrowers had the reasonable expectation and belief that they would not have to make additional payments on their federal student loans. This belief may well stop them from making payments even if the Department is prevented from effectuating debt relief.
"Unless the Department is allowed to provide one-time student loan debt relief, we expect this group of borrowers to have higher loan default rates due to the ongoing confusion about what they owe."
Myra Brown and Alexander Taylor, two student loan borrowers, filed the lawsuit, saying they did not have a chance to provide feedback about the plan.
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