One day after a judge dismissed a Republican-led lawsuit brought by six states opposing the loan-forgiveness scheme, a U.S. appeals court on Friday temporarily halted President Joe Biden’s proposal to cancel billions of dollars in student loan debt.
The 8th U.S. Circuit Court of Appeals granted an emergency stay in order to prevent the discharge of any student debt under the programme until the court resolves on the states’ request for a longer-term injunction while Thursday’s verdict against them is being reviewed.
A hurried briefing schedule was likewise mandated by the appeals court in St. Louis.
U.S. District Judge Henry Autrey in St. Louis said that the six states led by Republicans made “serious and significant challenges” to the debt relief plan. However, he threw out their complaint because they had the right to do so.
States like Nebraska, Missouri, Arkansas, Iowa, Kansas, South Carolina, and others said that Biden’s proposal circumvented congressional power and risked future tax revenues as well as money made by state agencies that finance or manage student loans.
The government would spend nearly $400 billion on debt forgiveness, according to a nonpartisan estimate from the Congressional Budget Office in September.
According to White House press secretary Karine Jean-Pierre, the temporary order that was issued on Thursday doesn’t stop borrowers from asking for help with their student loans, nor does it stop the Biden administration from reviewing applications and getting them ready to send to loan servicers.
The Department of Education currently has information on roughly 22 million Americans, and we encourage qualified borrowers to join them, said Jean-Pierre.
It’s important to remember that the order neither suggests that the case has merit nor overturns the trial court’s dismissal of it, she continued. “It essentially blocks discharge of debt until the (appeals) court rules,”
Republican Nebraska Attorney General Doug Peterson, who is leading the lawsuit, applauded the interim injunction.
He added that before shifting more than $400 billion in debt to American taxpayers, it is crucial for the court to consider legal problems surrounding presidential power.
A number of conservative state attorneys general and legal organisations have brought cases to the 8th Circuit in an effort to stop the debt relief plan proposed by Democrat Joe Biden in August.
In a second case brought by the Wisconsin-based Brown County Taxpayers Association, U.S. Supreme Court Justice Amy Coney Barrett dismissed an emergency motion to halt the debt relief scheme without providing any justification. Autrey issued her decision approximately an hour later.
According to Biden, borrowers who earn less than $125,000 per year, or $250,000 for married couples, will have up to $10,000 in student loan debt forgiven by the federal government. Up to $20,000 of the debt owed by borrowers who earned Pell Grants—grants given to low-income college students—will be forgiven.
During the 2020 presidential campaign, Biden said he would help former college students who were struggling with debt, and this plan made good on that promise.
Democrats hope that this strategy will get more people to vote for them in the November 8 midterm elections, which will decide who controls Congress.