Appeals court puts halt on Biden’s student debt forgiveness plan


A federal appeals court has temporarily blocked President Biden’s plan to forgive hundreds of millions of dollars in student loan debt.

The 8th US Circuit Court of Appeals order issued Friday prohibits the Biden administration “from discharging any student loan debt under the Cancellation program” until court proceedings for an injunction are completed.

The appeals court sided with six GOP-led states that requested Biden’s plan be put on hold.

The Biden administration had previously anticipated canceling debts as early as Sunday, according to court filings.

In September, attorneys general from six Republican states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — sued the Biden administration over the debt cancellation program, accusing the White House of overstepping its executive power.

They asked that the program be shut down, arguing that it is unconstitutional and is “not remotely tailored to address the effects of the pandemic on federal student loan borrowers.” 

Thursday night, U.S. District Judge Henry Autrey in St. Louis ruled that since the six states failed to establish standing, “the Court lacks jurisdiction to hear this case.” Hours later, the states filed a notice of appeal to the Eighth U.S. Circuit Court of Appeals asking the court to reconsider their efforts to block the program.

Joe Biden's plan to forgive student loans was temporarily blocked by an appeals court.
Joe Biden’s plan to forgive student loans was temporarily blocked by an appeals court.
REUTERS

Separately, the states also asked the court for an injunction prohibiting the administration from implementing the debt cancellation plan until the appeals process plays out, which was granted Friday.

Earlier Thursday, Supreme Court Justice Amy Coney Barrett declined to block the debt cancellation program following an appeal from a Wisconsin taxpayers group.

Nearly 22 million Americans had applied for student loan forgiveness as of Friday. The White House began beta testing the forgiveness applications last week by intermittently launching the page on StudentAid.gov.

Under Biden’s plan, borrowers are eligible for forgiveness of up to $10,000 in federally owned student debt if they have an annual income under $125,000, or live in households that make less than $250,000 per year.. 

Pell Grant recipients are eligible for another $10,000 in forgiveness. About 8 million people are expected to receive the benefits automatically, while the rest will need to apply.

Those who received federal Pell Grants to attend college are eligible for an additional $10,000. The plan makes 20 million eligible to get their federal student debt erased entirely.

The Congressional Budget Office in September calculated that debt forgiveness would cost the government about $400 billion over the next three decades.

With Post Wires



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