On Friday, a federal appeals court blocks the student loan forgiveness scheme of President Biden. The 8th Circuit Court of Appeals imposed a temporary stay in response to an emergency application filed by attorneys for several Republican-led states after a lower court determined that their September lawsuit seeking to halt the debt forgiveness program lacked standing.
Plaintiffs from Iowa, Kansas, Missouri, Nebraska, South Carolina, and Arkansas argued in their appeal that the forgiveness scheme will irrevocably affect their states’ student loan systems.
“Missouri suffers financial losses as a result of the cancellation,” the motion stated.
This hold is not based on the merits, but it does allow for additional briefings on the matter the following week.
This comes after the U.S. Supreme Court on Thursday denied an emergency appeal by a group of Wisconsin taxpayers who had also filed a second lawsuit challenging the scheme.
President Biden said in August that his administration will forgive student loan debt of up to $20,000 for millions of Americans. Under the new scheme, about 20 million people will be able to have their debt completely forgiven.
Low- and middle-income Pell Grant recipients can receive up to $20,000 in debt relief, while other borrowers can receive up to $10,000.
Individuals who earned less than $125,000 in 2020 or 2021 and married couples whose combined income was less than $250,000 are eligible for loan forgiveness under this program.
This week, the U.S. Department of Education officially unveiled its application website for debt relief. It is unknown how Friday’s decision will impact the site or the application procedure.