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

ST. LOUIS (AP) – A federal appeals court on Friday issued an administrative suspension that temporarily halts President Joe Biden’s plan to cancel billions of dollars in federal student loans.

The Eighth Circuit Court of Appeals has issued the suspension while considering a six-state, Republican-led motion to block the loan cancellation program. The suspension ordered the Biden administration not to act on the program while examining the appeal.

A notice of appeal to the United States Circuit Eighth Court of Appeals was filed late Thursday, hours after United States District Judge Henry Autrey in St. Louis ruled that since the states of Nebraska, Missouri, Arkansas , Iowa, Kansas and South Carolina failed to establish a position, “the court has no jurisdiction to hear about this case.”

Separately, the six states have also asked the district court for an injunction banning the administration from implementing the debt relief plan until the appeals process is over.

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

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See also: “That’s $ 10,000 up for grabs.” Borrowers who used Pell grants decades ago cannot find evidence and worry that they will miss out on Biden’s relief.

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

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 beneficiaries, who typically demonstrate more financial need, will receive an additional $ 10,000 of debt relief.

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

Cancellation applies to federal student loans used to attend college and graduate schools, 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 debt relief, with 20 million likely to get full debt cancellation, according to the administration.

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Read also: How to avoid being scammed when applying for student loan forgiveness

The announcement immediately became a major political issue ahead of November’s mid-term elections.

Conservative lawyers, Republican lawmakers, and business-oriented groups said Biden overstepped his authority by taking such radical action without the consent of Congress. They called it an unfair government gift to relatively affluent people at the expense of taxpayers who have not completed higher education.

Many Democratic lawmakers facing tough re-election contests have distanced themselves from the plan.

Biden on Friday blew up Republicans who criticized his relief program, saying “their indignation is wrong and it is hypocritical.” You noted that some Republican officials have been forgiven debts and loans for the pandemic.

The six states sued in September. Administration lawyers argued that the Department of Education has “broad authority to manage federal student financial aid programs.” A court filing stated that the Higher Education Relief Opportunities for Students Act of 2003, or HEROES Act, allows the Secretary of Education to waive or change the terms of federal student loans in times of war or national emergency.

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“COVID-19 is such an emergency,” the filing said.

The HEROES Act was enacted after the September 11, 2001 terrorist attacks to help members of the military. The Justice Department says the law allows Biden to reduce or cancel student loan debt during a national emergency. Republicans argue that the administration is misinterpreting 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 rippling. He said defaults on student loans have skyrocketed over the past two and a half years.

Other causes have also tried to stop the program. On Thursday, Supreme Court Justice Amy Coney Barrett rejected an appeal from a group of Wisconsin taxpayers seeking to stop the debt relief program.

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

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