With Biden's student debt plan blocked, CT borrowers in limbo: 'There’s a lot of frustration'

Shaniece Conyers, right, pictured with her father outside her parent's house in New Haven in 2012. Conyers is among the 26 million people in the U.S. who have applied for student loan forgiveness but are now limbo amid legal challenges to President Biden's debt relief plan.

Shaniece Conyers, right, pictured with her father outside her parent's house in New Haven in 2012. Conyers is among the 26 million people in the U.S. who have applied for student loan forgiveness but are now limbo amid legal challenges to President Biden's debt relief plan.

Shaniece Conyers / Contributed photo

Shaniece Conyers, a first-generation college student who owes $60,000 in loans, finally saw a path to chipping away at her debt. Now she’s in limbo.

President Joe Biden's plan to forgive student loan debt for millions of borrowers lost another battle in court on Monday when a federal appeals court panel agreed to a preliminary injunction halting the program while an appeal plays out.

The ruling by the three-judge panel from the 8th U.S. Circuit Court of Appeals in St. Louis came days after a federal judge in Texas blocked the program, saying it usurped Congress' power to make laws. The Texas case was appealed, and the administration is likely to appeal the 8th Circuit ruling as well.

In the meantime, the Biden administration is no longer accepting applications for federal student loan forgiveness. As for the 26 million people including Conyers, 33, of New Haven, who already applied to have their debt canceled – many are confused about what happens next including whether they will have to resume making payments on Jan. 1, when a pause prompted by the COVID-19 pandemic is set to expire.

“I haven’t gotten word of approval, just that my application was received,” Conyers said in a text message Monday. “I am curious as to what happens next.”

The Biden administration has approved 16 million applications so far, but relief has not gone out because of the legal challenges. White House Press Secretary Karine Jean-Pierre said after the ruling in Texas that the U.S. Department of Education would “quickly process their relief once we prevail in court.”

President Biden announced plans in August to forgive up to $20,000 in federal student loan debt for individuals with incomes below $125,000 or households earning less than $250,000 – a long-awaited campaign promise. The White House estimates that 40 million Americans are eligible for the relief.

As a Pell grant recipient, who typically demonstrate more financial need, Conyers believes she is eligible for maximum forgiveness of $20,000. While that would still leave her $40,000 in debt, she said in an interview following Biden’s August announcement that it was still cause to celebrate and a move in the right direction. She is a member of the Student Loan Fund, which advocates for full cancellation.

“I am deeply saddened that people will go out their way to block this forgiveness plan,” she said Monday. “I hope that we will overcome this nonsense.”

Conyers is among the 500,000-plus student borrowers in Connecticut, who owe nearly $20 billion, according to the Student Borrower Protection Center, a national nonprofit focused on alleviating the burden of student debt. On average, Connecticut borrowers owe $36,300, according to the center. Black women such as Conyers graduate with the most debt of any group — $38,000 on average.

“A lot of borrowers have reached out and said, ‘What does this mean for us?’ There’s a lot of frustration. This is not the first time a promise to borrowers was not delivered,” said Cristher Estrada-Perez, executive director of the Student Loan Fund.

Estrada-Perez said she’s not sure how many people in Connecticut have applied for forgiveness as state level data is not readily available. Her group is still compiling data on the number of borrowers its helped, which should be ready in the next couple of days, she said.

Groups like SLF are urging Biden to extend the pause on student loan payments until the court challenges are resolved. “A lot of those borrowers will have to start paying again even if they are eligible for cancellation,” Estrada-Perez said.

Estrada-Perez, 31, said while it’s her job, advocating for student debt relief is also personal. She has $80,000 in student debt and her mother, 47, who recently got her associate’s degree in nursing, has $90,000 in loans.

“She’s almost 50. She’s never going to be able to pay that back,” Estrada-Perez said. “She was planning to buy a house this year but doesn’t know if she can do it.”

Reporting from the Associated Press is included in this report.