Federal court freezes student loan relief program; what you need to know

 

MILWAUKEE (CBS 58) -- Millions of Americans with student debt are now in limbo. Last week, an appeals court issued a stay that temporarily blocks President Biden's student loan forgiveness program.

More than 20 million people have already applied for student loan forgiveness but the looming legal challenges the program faces are causing some confusion.

"I am concerned, and I guess I am worried," said Ava Anderson, UW-Milwaukee sophomore.

The 8th Circuit Court of Appeals has issued a stay temporarily blocking the Biden administration's student loan forgiveness program. The pause, which came down Friday evening, is in response to an emergency motion brought by attorneys from several Republican-led states.

UW-Milwaukee students who applied for debt relief say they're now left with questions.

"It does worry me that it's not going to end up happening," said UW-Milwaukee sophomore Brady Peterson.

This roadblock is leaving many wondering "what happens next?" Especially current students who say they're relying on the relief.

"It's been hard to make ends meet with everything going on with college and paying for housing and everything by myself," said Anderson.

Timing is also top of mind as the pandemic pause on student loan payments is expected to come to an end in January.

"With the state of the economy right now, it's not looking too good," said Phillip Stan, UW-Milwaukee sophomore

One in eight Wisconsinites have student loan debt averaging about $30,000 per borrower.

"At this point I think we just have to let this play out in the courts," said Tim Opgenorth, UW-Milwaukee director of financial aid.

While things remain in limbo, borrowers are encouraged to apply for relief if they are eligible and follow updates closely.

"None of us really know is this going to be a short-term halt, a long-term halt...and we don't know is there going to be other lawsuits that trickle out," said Opgenorth.

"We will continue to review applications. We will quickly process discharges when we are able to do so and you will not need to reapply," the education department said.

Both sides in the lawsuit will respond to the court this week and the case is expected to be reviewed quickly.

Experts, however, say it's unlikely this will be the final legal hurdle.