US Appeals Court Temporarily Blocks Biden’s Student Loan Debt Giveaway – President Biden’s plan to forgive hundreds of millions of dollars in student loan debt has been temporarily blocked by a federal appeals court. The Biden administration is prohibited from “discharging any student loan debt under the Cancellation program” until legal processes for an injunction are concluded, according to the 8th US Circuit Court of Appeals order issued on Friday.
Six states governed by the GOP gained the appeals court’s support when they asked that Biden’s plan be suspended. According to court filings, the Biden administration had originally planned on cancelling debts as early as Sunday. Attorneys general from six Republican states, including Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina, filed a lawsuit against the Biden administration in September over the debt cancellation program, claiming the White House had exceeded its power.
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Since it is unlawful and “not remotely tailored to address the effects of the pandemic on federal student loan borrowers,” they requested that the program be cancelled. As a result of the six states’ failure to establish standing, U.S. District Judge Henry Autrey in St. Louis declared on Thursday night that “the Court lacks authority to hear this case.”
A few hours later, the states sent an appeal notice to the Eighth U.S. Circuit Court of Appeals, pleading for the court to take another look at their attempts to block the program. Separately, the states requested, and the court granted on Friday, an injunction blocking the administration from carrying out the debt forgiveness plan while the appeals process is ongoing.
Following an appeal from a Wisconsin taxpayers group, Supreme Court Justice Amy Coney Barrett decided against blocking the debt cancellation program earlier on Thursday. By Friday, nearly 22 million Americans had submitted applications for student loan relief. The website on StudentAid.gov was periodically launched last week as part of the White House’s beta testing of the forgiveness applications.
In accordance with Biden’s proposal, borrowers who earn less than $125,000 annually or who reside in families earning less than $250,000 annually may be eligible to have up to $10,000 of their federally held student debt canceled. Recipients of Pell Grants are additionally eligible for a $10,000 forgiveness. About 8 million people are expected to receive the benefits automatically, while the rest will need to apply.
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A further $10,000 is available to those who got federal Pell Grants to pay for their college education. The idea qualifies 20 million people to have all of their federal student debt forgiven. The cost of debt forgiveness to the government over the following three decades was estimated by the Congressional Budget Office in September at $400 billion.
