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U.S. 8th Circuit Judge Stops Biden’s Student loan Forgiveness Plan
A U.S. 8th Circuit Court of Appeals has temporarily stopped President Joe Biden’s plan to cancel billions of dollars in university and college student loan debt.
The Court of Appeals judge ordered an immediate stay prohibiting any student debt discharge under the program until the court resolves the state’s request for a longer-term injunction while the ruling against them is reviewed.
The appeals court in St. Louis also set an expedited briefing schedule in the case.
While the six Republican-led states posed “important and significant challenges to the debt relief plan,” U.S. District Judge Henry Autrey in St. Louis dismissed their complaint on Thursday, claiming they had the proper legal standing to prosecute the case.
Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina all stated Biden’s plan circumvented congressional power and jeopardized future tax revenues and money earned by state entities that invest in or manage student loans.
In September, the nonpartisan Congressional Budget Office estimated that debt forgiveness would cost the US taxpayers more than $400 billion.
Student loan forgiveness application online
According to White House press secretary Karine Jean-Pierre, the temporary order does not preclude borrowers from applying online for student debt forgiveness or prevent the Biden administration from assessing applications and preparing them for delivery to student loan servicers.
“We encourage qualified borrowers to join the almost 22 million Americans whose information is currently in the hands of the Department of Education,” Jean-Pierre added.
“It is crucial to stress that the order neither reverses nor suggests that the case has validity,” she noted. “It prohibits the debt from being cancelled until the (appeals) court rules.”
The temporary stay was welcomed by Nebraska Attorney General Doug Peterson, a Republican leading the lawsuit.
“It’s critical that the court examine the legal concerns concerning presidential power before transferring over $400 billion in debt to American taxpayers,” he said.
The case before the 8th Circuit is one of several brought by state attorneys general and legal groups seeking to stop Biden’s student debt forgiveness proposal unveiled in August.
Judge Autrey issued his decision just an hour after Trump-appointed U.S. Supreme Court Justice Amy Coney Barrett dismissed an emergency request to halt the student loan debt relief scheme in a separate case brought by the Brown County Taxpayers Association of Wisconsin.
According to Biden, the federal government will cancel up to $10,000 in student loan debt for borrowers earning less than $125,000 per year or $250,000 for married couples. Borrowers who obtained Pell Grants for low-income college students will have up to $20,000 in student loan debt forgiven.
The measure fulfilled Biden’s vow to help student debt-ridden former college students during his 2020 presidential campaign.
Democrats are hopeful that the policy will increase support for them in the Nov. 8 midterm elections, which will determine control of Congress.
