Federal appeals court temporarily blocks Biden’s student loan forgiveness program

ST. LOUIS (AP) — A federal appeals court issued an administrative stay Friday night temporarily blocking President Joe Biden’s plan to pay off billions of dollars in federal student loans.

The 8th Circuit Court of Appeals issued the stay while it considers a motion by six Republican-led states to block the loan cancellation program. The suspension ordered the Biden administration not to act on the program while it considers the appeal.

The order came just days after people began applying for loan forgiveness. It was not immediately clear how the suspension would affect those who have already applied.

The court set a 5 p.m. CDT Monday deadline for a response from the Biden administration and a 5 p.m. Central Tuesday deadline for any replays from the appellants.

See also: What are Pell Grants? Biden’s student loan forgiveness goes up to $20,000 for Pell Grant recipients.

See also: ‘It’s $10,000 at stake.’ Borrowers who used Pell grants decades ago can’t find proof and fear losing the mantle of Biden.

Lawyers for the Republican-led states had asked the court to reconsider its effort to block the Biden administration’s program to forgive student loan debt.

A notice of appeal was filed Thursday night with the U.S. Court of Appeals for the Eighth Circuit, hours after the U.S. District Judge, “the Court lacks jurisdiction to hear this case ”.

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Separately, the six states have also petitioned the district court for an injunction barring the administration from implementing the debt cancellation plan until the appeals process is complete.

Speaking at Delaware State University, a historically black university where most students receive federal Pell grants, Biden said Friday that nearly 22 million people have applied for loan relief in the week since his administration made available his Online application.

See also: How to Avoid Getting Scammed When You Apply for Student Loan Forgiveness

The plan, announced in August, would cancel $10,000 in student loan debt for those earning less than $125,000 or families with less than $250,000 in income. Pell Grant recipients, who typically demonstrate greater financial need, will receive an additional $10,000 of debt forgiveness.

The Congressional Budget Office has said the program will cost about $400 billion over the next three decades. James Campbell, an attorney for the Nebraska attorney general’s office, told Autrey at an Oct. 12 hearing that the administration is acting outside its authority in a way that will cost states millions of dollars.

The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans. Current college students qualify if their loans were disbursed before July 1. The plan makes 43 million borrowers eligible for some debt forgiveness, with 20 million potentially having their debt wiped out entirely, according to the administration.

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The announcement immediately became a major political issue ahead of the November midterm elections.

Conservative lawyers, Republican lawmakers and business-oriented groups have claimed that Biden exceeded his authority by taking such sweeping steps without the consent of Congress. They called it an unfair government giveaway to relatively wealthy people at the expense of taxpayers who didn’t go to college.

Many Democratic lawmakers facing tough reelection races have distanced themselves from the plan.

Biden on Friday slammed Republicans who have criticized his aid program, saying “their outrage is wrong and hypocritical.” She noted that some Republican officials had pandemic relief debts and loans forgiven.

All six states sued in September. Attorneys for the administration countered that the Department of Education has “broad authority to administer federal student financial aid programs.” A court filing indicated that the Higher Education Relief Opportunities for Students Act of 2003, or HEROES Act, allows the secretary of education to waive or modify the terms of federal student loans in times of war or national emergency.

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“COVID-19 is an emergency,” the presentation read.

The HEROES Act was enacted after the terrorist attacks of September 11, 2001 to help members of the military. The Justice Department says the law allows Biden to reduce or erase student loan debt during a national emergency. Republicans argue that the administration is misreading the law, in part because the pandemic no longer qualifies as a national emergency.

Justice Department attorney Brian Netter told Autrey at the Oct. 12 hearing that the fallout from the COVID-19 pandemic is still spreading. He said student loan defaults have skyrocketed in the last two and a half years.

Other lawsuits have also sought to stop the program. Earlier Thursday, Supreme Court Justice Amy Coney Barrett rejected an appeal by a group of Wisconsin taxpayers seeking to stop the debt cancellation program.

Barrett, who oversees emergency appeals for Wisconsin and neighboring states, would not comment on rejecting the Brown County Taxpayers Association’s appeal. The group wrote in its Supreme Court filing that it needed an emergency order because the administration could start paying off outstanding student debt as soon as Sunday.


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