U.S. Appeals Court Temporarily Blocks Biden’s Student Loan-forgiveness

A U.S. appeals court on Friday “temporarily blocked” President Joe Biden’s plan to cancel billions of dollars in college student debt, one day after a judge dismissed a Republican-led lawsuit by six states challenging the loan-forgiveness program.

The 8th U.S. Circuit Court of Appeals granted an ’emergency stay barring’ the discharge of any student debt under the program until the court rules on the states’ request for a longer-term injunction while Thursday’s decision against them is appealed.

The St. Louis-based appeals court also ordered an ‘expedited’ briefing schedule on the matter.

Court Rule
U.S. District Judge Henry Autrey in St. Louis ruled on Thursday that while the six Republican-led states had raised “important and significant challenges to the debt relief plan,” he threw out their lawsuit on grounds they ‘lacked the necessary legal standing’ to pursue the case.

Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina said “Biden’s plan skirted congressional authority and threatened the states’ future tax revenues and money earned by state entities that invest in or service the student loans.”

The non-partisan Congressional Budget Office in September calculated the debt forgiveness would cost the government about $400 billion.

White House press secretary Karine Jean-Pierre said “Thursday’s temporary order does not prevent borrowers from applying for student debt relief or bar the Biden administration from reviewing applications and preparing them for transmission to loan servicers.”

“We encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has,” Jean-Pierre said.

“It is important to note that the order does not reverse the trial court’s dismissal of the case or suggest that the case has merit,” she added. “It merely prevents debt from being discharged until the (appeals) court makes a decision.”

Nebraska Attorney General Doug Peterson, a Republican who is leading the lawsuit, welcomed the temporary stay.

Reuters /Shakirat Sadiq