A U.S. appeals court has extended a block on President Joe Biden's administration from fulfilling his plan to cancel hundreds of billions of dollars in student loan debt at the urging of six Republican-led states, a court filing on Monday showed, Reuters reported. The St. Louis-based 8th U.S. Circuit Court of Appeals issued an injunction barring the U.S. Department of Education from erasing student loan debt as part of Biden's plan to deliver "life-changing relief" to tens of millions of borrowers. The court on Oct. 21 temporarily barred Biden's administration from discharging student loans while it considered an emergency request by the six states for an injunction. The states' case was dismissed, though they are appealing that decision. Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina claim Biden's plan skirted congressional authority and threatens the states' future tax revenues and money earned by state entities that invest in or service student loans. But U.S. District Judge Henry Autrey in St. Louis on Oct. 20 dismissed the states' case, saying that while that raised important challenges they lacked legal standing. Debt forgiveness would eliminate about $430 billion of the $1.6 trillion in outstanding student debt and that over 40 million people were eligible to benefit, according to the nonpartisan Congressional Budget Office.Read more.
In related news, White House officials are weighing extending a pause on student debt payments after a federal appeals court blocked President Biden’s plan to cancel up to $20,000 in debt per borrower, the Washington Post reported. In August, Biden announced that the administration would implement student debt forgiveness while simultaneously ending a moratorium on student debt payments that started during the pandemic. But Biden’s plan has so far been thwarted in the courts. The U.S. Court of Appeals for the 8th Circuit, by a 3-0 vote on Monday, issued an injunction preventing the administration from going forward with discharging debt, and a Texas judge last week declared the program unlawful in a separate ruling. Although the Biden administration has vowed to defend the program in court, White House officials have in recent days discussed the possibility of extending the debt freeze again if they are unable to move forward with the president’s initial program. Payments had been scheduled to resume on Jan. 1 in conjunction with the loan forgiveness. Read more.
