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U.S. appeals court temporarily blocks Biden's student loan forgiveness plan

Economy Oct 22, 2022 02:45AM ET
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© Reuters. U.S. President Joe Biden delivers remarks about the student loan forgiveness program from an auditorium on the White House campus in Washington, U.S., October 17, 2022. REUTERS/Leah Millis

By Eric Beech and Steve Gorman

WASHINGTON (Reuters) -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.

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.

"It’s very important that the legal issues involving presidential power be analyzed by the court before transferring over $400 billion in debt to American taxpayers,” he said.

The case reaching the 8th Circuit is one of a number that conservative state attorneys general and legal groups have filed seeking to halt the debt forgiveness plan announced in August by Biden, a Democrat.

Autrey ruled about an hour after U.S. Supreme Court Justice Amy Coney Barrett denied without explanation an emergency request to put the debt relief plan on hold in a separate challenge brought by the Wisconsin-based Brown County Taxpayers Association.

Biden said the U.S. government will forgive up to $10,000 in student loan debt for borrowers making less than $125,000 a year, or $250,000 for married couples. Borrowers who received Pell Grants to benefit lower-income college students will have up to $20,000 of their debt canceled.

The policy fulfilled a promise that Biden made during the 2020 presidential campaign to help debt-saddled former college students.

Democrats are hoping the policy will boost support for them in the Nov. 8 midterm elections in which control of Congress is at stake.

U.S. appeals court temporarily blocks Biden's student loan forgiveness plan
 

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Comments (8)
Shanta Robinson
Shanta Robinson Oct 22, 2022 12:46PM ET
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Debt relief now or you will have to do it later. The amount of debt will always be in front of congress face.
Art Carrano
Art Carrano Oct 22, 2022 9:16AM ET
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Did you voluntarily and knowingly take out a loan? A home loan? A car loan? Business loan? Student loan? Pay it back.
Alaa Laanaiti
Alaa Laanaiti Oct 22, 2022 5:47AM ET
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Yeh that's the midterm elections effect.
ZS Beck
ZS Beck Oct 22, 2022 5:46AM ET
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Trying desperately to buy some votes? The faster way another stimulus check like last time. That landed Biden the presidency,
Brad Albright
Brad Albright Oct 22, 2022 5:46AM ET
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@ZS Beck: Yours is an example of how immune to reason are the right wing kooks. In this case, not even the ability to comprehend cause and effect. It is horrendously inane to claim that a stimulus check that came under Trump helped Biden get elected. Think!
David Beckham
David Beckham Oct 22, 2022 12:51AM ET
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Ok uk tax cut by borrowing - resign Biden debt forgiven - you are strong go to hell westerns
Brad Albright
Brad Albright Oct 22, 2022 12:51AM ET
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Bigot.
Darren Caris
DJC1 Oct 21, 2022 10:41PM ET
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Thank goodness someone has a brain..
David Farrell
David Farrell Oct 21, 2022 10:37PM ET
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They have picked the wrong hill to die on. I think it's obvious to me who every recent college graduate will avoid voting for, now. Way to help make the democrats look good, republicans
Stephen Fa
Stephen Fa Oct 21, 2022 8:05PM ET
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The US President does not have authority to spend half a trillion US dollars. Biden should be impeached for breaking this law.
Brad Albright
Brad Albright Oct 21, 2022 8:05PM ET
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Why don't you leave commentary of US law to those who know a little about it?
 
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