Student Debt Relief App Already Handling Half of Expected Demand

The Department of Education’s one-time student debt relief application appears to be holding up nicely against website traffic during its first week after completing beta testing – with 22 million people using the site since then. That figure represents more than half of the universe of borrowers eligible to get student debt relief.

Technology performance aside, however, when and whether the Education Department ends up granting debt relief promised by the Biden administration is tied up in court, at least for the moment.

The White House said that it is still encouraging eligible borrowers to apply for their debt relief despite the 8^th Circuit Court of Appeals issuing an order on Oct. 21 that prohibits the discharge of any student loan debt until a final decision is made on a lawsuit opposing the program.

“Tonight’s temporary order does not prevent borrowers from applying for student debt relief at studentaid.gov – and we encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has,” White House Press Secretary Karine Jean-Pierre said in a statement on Friday night.

There are more than 40 million borrowers who would benefit from the one-time debt relief of up to $20,000, with eight million applicants successfully applying online in the first 72 hours. Jean-Pierre said the Biden administration will continue to review applications and prepare them for transmission to loan servicers.

A Republican-led coalition of states filed a suit to stop the student loan forgiveness, arguing that the states and loan service providers will suffer financially as a result of the debt cancellation. A Federal District Court judge dismissed the case, but the coalition of states appealed to the 8^th Circuit. That court is expediting its action in the case, with briefings due today.

This temporary order is a setback for the Biden administration, as the president promised borrowers will begin to see the forgiveness reflected in their accounts as early as Oct. 23.

Jean-Pierre encouraged people to continue to apply, reiterating that the appeals court order is not final, and saying it just “merely prevents debt from being discharged until the court makes a decision.”

“We will continue to move full speed ahead in our preparations in compliance with this order,” Jean-Pierre said.