A federal appeals court on Friday is blocking President Biden’s student loan forgiveness program. The 8th Circuit Court of Appeals issued a temporary stay in response to an emergency motion by attorneys for several Republican-led states after a lower court ruled their September law to stop the debt forgiveness program lack of standing.
In their appeal, the plaintiffs — including Iowa, Kansas, Missouri, Nebraska, South Carolina and Arkansas — said the forgiveness program will irreparably harm their states’ student loan programs.
“Missouri is harmed by the financial losses associated with the cancellation,” the motion read.
The stay is not based on the merits, but it allows for more briefings on the issue next week.
This also comes after the US Supreme Court on Thursday emergency appeal denied by a group of Wisconsin taxpayers who also challenged the plan in a separate lawsuit.
President Biden was announced in August that his administration is canceling up to $20,000 in student loan debt for millions of Americans. Almost 20 million people will be eligible to have their debts completely canceled under the new plan.
Borrowers who received Pell Grants, which are for low- and moderate-income families, can get up to $20,000 in debt forgiven, and other borrowers can get up to $10,000 in relief.
Only individuals who earned less than $125,000 in 2020 or 2021 and married couples with gross annual income below $250,000 are eligible for loan relief under the program.
Earlier this week, the US Department of Education formally launched their debt relief application website. It is unclear how Friday’s ruling will affect the site or the application process. However, White House press secretary Karine Jean-Pierre said in a statement Friday afternoon that the temporary order “does not prevent borrowers from applying for student debt relief.”
“It also does not prevent us from reviewing these applications and preparing them for transmission to foreign servicers,” said Jean-Pierre. “It is also important to note that the order does not reverse the trial court’s dismissal of the case, or imply that the case has merit. It is merely a prohibition against debt be released until the court makes a decision.”
U.S. Secretary of Education Miguel Cardona echoed that sentiment in his own statement, saying: “Today’s tentative decision does not stop the Biden Administration’s efforts to give borrowers the opportunity to apply for debt relief, and it does not prevent us from reviewing the millions of requests we have. received.”
— Robert Legore contributed reporting.
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