Biden Student Debt Relief Plan Blocked By Judge: What To Know In NJ

NEW JERSEY — A federal judge in Texas struck down President Joe Biden’s student loan forgiveness program Thursday, putting New Jersey residents among more than 26 million people who have applied for relief deeper in limbo.

For now, the application process is paused, according 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 who demonstrate greater financial need.

"If you've already applied, we'll hold your application," the note said, adding that updates will be posted on the website when they’re 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 canceled if they earn less than $125,000 ($250,000 for married couples) a year.

Still unsettled is whether New Jersey borrowers will have to resume payments on Jan. 1, when the pause prompted by COVID-19 is set to expire. Economists worry that if the relief isn’t available, people who haven’t financially rebounded from the pandemic default on their loans.

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

"The President and this Administration are determined to help working, and middle-class Americans get back on their feet, while our opponents — backed by extreme Republican special interests — sued to block millions of Americans from getting much-needed relief," Jean-Pierre said in a statement.

The program had been on hold since Oct. 21, when the U.S. 8th Circuit Court of Appeals granted an administrative stay, temporarily pausing 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 outlined in our Constitution be preserved."

The Associated Press contributed reporting.