The 8th U.S. Circuit Court of Appeals has granted an emergency stay pending the appeal of a lawsuit seeking to delay the scheduled rollout of the Biden administration’s promised student debt relief.

In other words, borrowers hoping to see $10,000 or $20,000 wiped from their debts will have to wait while this lawsuit proceeds; hearings are already scheduled for next week. There are also four other lawsuits pending appeal or awaiting hearing.

The stay is no reason to panic, says Mike Pierce, director and co-founder of the Student Borrower Protection Center. It’s procedural. The court cannot make a ruling, says Pierce, when it hasn’t been fully briefed. The stay calls for a response from the Justice Department by Tuesday afternoon.

“There’s not really anything to see here,” says Pierce.

The temporary halt came just days before the first borrowers were expected to see their balances reduced. The White House said earlier this month it would not deliver relief prior to Oct. 23.

On Oct. 21, Biden said 22 million borrowers had already submitted their applications since the form first went live in beta form a week prior. The White House has stated an estimated 40 million borrowers would be eligible for cancellation. The debt relief application is still open.

What does the lawsuit claim?

Six states (Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) jointly claim Biden’s debt relief would harm tax revenue in their states and the finances of state-based loan agencies. All six of the states are Republican-led.

These student loan servicers and companies manage commercially held FFELP loans, an older type of federal student loan originally funded by private companies. They claim that letting FFELP borrowers consolidate their loans to be eligible for cancellation would hurt their bottom lines because it would eliminate or reduce anticipated interest payments.

In response, the Biden administration in late September reversed cancellation eligibility for borrowers with commercially held FFELP loans.

A federal district judge dismissed the case on Oct. 20; the plaintiffs immediately filed an emergency motion with the 8th U.S. Circuit Court of Appeals for an administrative stay. They asked the court to pause the scheduled rollout of debt cancellation by 9 a.m. CST Saturday, Oct. 22.

The court didn’t wait that long; it approved the administrative stay on Friday.

Where does this leave borrowers?

Borrowers who applied or were waiting for automatic relief are now in limbo. And federal student loan payments are expected to restart in January 2023 after a nearly three-year pause due to the pandemic, unless the pause is extended again.

No additional extension has yet been announced. It’s wisest to proceed as if payments will resume as scheduled on Jan. 1.

If you qualify for debt relief and haven’t applied, do so. It can’t hurt, and you’ll secure your spot in line if legal obstacles are cleared.

If you planned to seek a refund of payments made during the pause, reconsider. You are still able to ask for a refund, but as before, the amount refunded will be added to your loan balance.

If you already received a refund on payments made during the pause, don’t spend it. If one of the lawsuits succeeds, you may want to put it back toward your loan balance.

Anna Helhoski writes for NerdWallet.

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Full student loan forgiveness could be closer than you think under temporary rules for Public Service Loan Forgiveness, or PSLF — but time is running out to apply.

“They should rush to get this done because the program is far more inclusive than it’s ever been in the past,” says Kristen Ahlenius, an accredited financial counselor and director of education at Your Money Line, a financial wellness company.

Payment requirements for the program are more lenient under a limited waiver that expires Oct. 31. Before the waiver, Ahlenius says, “PSLF was kind of this dismissed program for so long because it was so unachievable.”

The basic requirements for PSLF are to work for a qualifying public service employer, make 120 student loan payments and have federal direct loans. But the program has lots of caveats, which led to approval rates below 2% and furious, confused borrowers.

“People thought they were on track and submitted their application only to get a rejection,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors. “In particular, that happened to people who had the wrong kind of loans and people who were on the wrong payment program.”

In addition to having direct loans, borrowers must make payments on an income-driven repayment plan to be eligible.

The PSLF waiver addresses those criticisms. It counts more time toward the required 120 months, including periods of hardship deferment, months with late payments and months not enrolled in income-driven repayment. It also opens the door to borrowers with Federal Family Education Loan Program, or FFELP, loans.

Here’s who should apply now and how to do it.

Who should apply now

Current and previous public service workers

Your job sector is the key criterion for the PSLF waiver. Your time with a qualifying employer must coincide with the time your student loans were in repayment.

These types of employment typically qualify:

• Federal jobs.
• State government jobs.
• Local government jobs.
• Tribal government jobs.
• Not-for-profit organization jobs.
• Military service.

Your employer is what matters — not what you do. Payments won’t count if you work for a private employer, as a government contractor or part time. Parent PLUS loans and joint spousal consolidation loans don’t qualify, either — no matter your job.

Check the PSLF employer search tool to make sure your employment qualifies. “You might be closer than you think,” Ahlenius says.

FFELP borrowers

FFELP loans normally aren’t eligible for PSLF. If you first consolidate your FFELP loans into a direct loan, however, your previous payments will be counted toward forgiveness — thanks to the waiver.

The employment qualifications still apply.

Previously denied applicants

If you were denied PSLF in the past, you could receive additional months toward the 120 needed for forgiveness under the waiver.

The Department of Education said it is reevaluating previously denied PSLF claims and will contact borrowers whose accredited time is adjusted.

“If you haven’t heard anything, you should absolutely submit again,” Mayotte says.

How to apply

Applying for the PSLF waiver has only a few steps:

1. Log into studentaid.gov to make sure you have direct loans.
2. Consolidate if you don’t have direct loans.
3. Complete your employer certification form(s) with the required signatures dated by Oct. 31.
4. Submit the form(s) to the Education Department.

You must complete a separate employer certification form for each eligible job. Using the PSLF help tool, available at studentaid.gov/pslf, instead of the paper form can streamline the process and help prevent errors.

“Anybody that has any period of working full time for either a government employer, any 501(c)(3), you’ve got nothing to lose and everything to potentially gain,” Mayotte says.

Cecilia Clark writes for NerdWallet.

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When she was 19, writer Emily Maloney found herself facing about $50,000 in medical debt after hospital treatment for a mental health crisis. The debt followed her throughout her twenties, hurting her credit and leading to stressful calls from collection agencies.

Her experience is all too common: The Consumer Financial Protection Bureau reports that about 1 in 5 U.S. households carries medical debt. People with medical debt are more likely to face anxiety, stress or depression and avoid filling prescriptions because of the cost.

The risk of “medical debt looms over every consumer and impacts their lives,” says John McNamara, assistant director of consumer credit, payments and deposits markets at the CFPB. He adds that recent changes to the way medical debt is reported by credit bureaus should help consumers: Paid medical debts will no longer show up on credit reports and no new medical debt will show up until 12 months have passed (up from six months). In addition, in the first half of next year, the credit bureaus will stop reporting unpaid medical debts under $500.

Eventually, Maloney’s debt was resolved through a combination of a helpful customer service representative and exceeding her state’s statute of limitations. She wrote a book, “Cost of Living,” based on her experiences. She wants to assure others facing medical debt that they can take steps to reduce it.

“It takes time, but you can appeal the insurance company’s decision or ask [the provider] for a discount, so it’s worth a shot,” she says.

In other words, consumers might have more power than they think. Here are some ways to exercise that power over your medical debt.

Review your bill closely

It can be tempting to shove a large bill into the trash in frustration. But Dan Weissmann, creator of “An Arm and a Leg,” a podcast about the cost of health care, instead recommends checking closely for errors made by the care provider or insurance company.

“It’s an unfair amount of homework for us to do, because if you find an error, then you have to complain and invest your time, but some medical bills have errors,” he says.

Weissmann says it’s also worth checking your rights under the No Surprises Act, which went into effect in January 2022 and protects consumers from some types of unexpected medical bills.

Ask your provider for assistance

Many hospitals offer financial assistance to those who meet income thresholds. “If you get an amount you weren’t expecting, call the hospital and say, ‘Am I eligible for a discount? What is your policy on financial assistance?’” says Richard Gundling, vice president at the Healthcare Financial Management Association, an association of financial executives in the health care industry.

Hospitals often have “charity care” policies to grant a lower price or even forgive the debt altogether, but consumers may have to be aggressive in asking for them. Eligibility for the programs varies by state and hospital, but nonprofit hospitals are required to have financial assistance policies. Hospitals may also offer payment plans, so you have more time to pay.

Hospitals can also connect you with financing options such as personal loans and medical credit cards, which can be helpful but also pose risks. The CFPB’s McNamara warns that credit cards, for example, can accrue additional interest charges.

Be persistent and enlist support

Lorraine Coughlin, president of LMC Medical Claims Management in West Palm Beach, Florida, helps people work out medical bills with insurance companies for a living. She says the number one strategy is persistence.

“You have to make the phone call and ask questions. Don’t just make payments if you get a surprise bill,” she says. Sometimes it might take an hour or more, but making that call can save you thousands of dollars, she says.

Medical billing advocates like Coughlin can do that work for you, but they typically charge a fee and a percentage of any savings. McNamara warns there are predators who call themselves billing or consumer advocates but in reality, they could take your money without providing any real assistance. He recommends doing some research before sharing any personal information or paying upfront fees.

If you are struggling to get satisfactory answers from your insurance company and are employed, Gundling suggests asking your company’s employee benefits contact for help. “They can be your advocate,” he says.

Get ready for the next medical bill

The ideal time to work on handling medical debt is before you have it, Gundling says. With the rise of high-deductible health insurance plans, even people with insurance will increasingly face pricey bills, which makes an emergency fund even more important.

“If you know you have a plan with a large deductible, have the cash in the bank,” he says.

You could try setting money aside through automated deposits into a high-yield savings account or taking advantage of a health care flexible savings account if your employer offers one.

Similarly, Gundling suggests asking questions about what your insurance covers and which providers are in-network before seeking care whenever possible.

The bottom line is that attacking, not ignoring, medical debt can be your best hope of eventually putting it behind you as Maloney did.

Kimberly Palmer writes for NerdWallet.

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