Court Blocks Student Loan Plan
The 8th U.S. Circuit Court of Appeals has temporarily blocked President Joe Biden’s plan to cancel billions of dollars in federal student loans. The action is in response to a petition from six Republican-led states that sought a pause on the proposed student debt relief while the court rules on their request for a longer-term injunction.
The lawsuit by the six Republican-led states—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina—is before the appeals court after a lower court judge rejected the suit a day prior.
The states argue that the debt relief program bypassed Congress and poses a threat to the states’ future tax revenues, as well as money earned by state entities that invest in or service the student loans. But U.S. District Judge Henry Autrey in St. Louis determined that while the six states had raised “important and significant challenges to the debt relief plan,” their lawsuit lacked the necessary legal standing to pursue the case.
Biden’s student debt relief program, announced in August, seeks to cancel up to $10,000 to borrowers who earn less than $125,000 per year (or $250,000 as a couple per year), or $20,000 in debt relief to Pell Grant recipients who meet similar income standards.
Applications opened on Oct. 14. Nearly 22 million borrowers had applied for the debt relief program since — about half of the more than 40 million Americans that the Department of Education expects are eligible for some amount of debt relief.
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