U.S. appeals court temporarily blocks Biden’s student loan forgiveness plan

WASHINGTON, Oct 21 (Reuters) – A U.S. appeals court on Friday temporarily blocked President Joe Biden’s plan to forgive billions of dollars in student debt, a day after a judge dismissed a lawsuit by Republicans by six states challenging the loan forgiveness program. .

The 8th U.S. Circuit Court of Appeals granted an emergency stay barring cancellation of any student debt under the program until the court rules on the states’ request for an injunction longer-term as Thursday’s decision against them is appealed.

The St. Louis Court of Appeals also ordered an expedited disclosure timeline on the matter.

U.S. District Judge Henry Autrey in St. Louis ruled Thursday that if the six Republican-led states had raised “substantial and significant challenges to the debt relief plan”, he dismissed their lawsuit on the grounds that they lacked the legal capacity to pursue the case.

Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina said Biden’s plan circumvents congressional authority and threatens future state tax revenue and entity-earned money governments that invest or manage student loans.

The nonpartisan Congressional Budget Office calculated in September that debt cancellation cost the government around $400 billion.

White House press secretary Karine Jean-Pierre said Thursday’s temporary order does not prevent borrowers from seeking student debt relief or prevent the Biden administration from reviewing applications and prepare them for transmission to loan officers.

“We encourage eligible borrowers to join the nearly 22 million Americans the Department of Education already has information about,” Jean-Pierre said.

“It is important to note that the order does not reverse the dismissal of the case by the trial court or suggest that the case has merit,” she added. “It simply prevents the debt from being discharged until the court (of appeal) makes a decision.”

Nebraska Attorney General Doug Peterson, a Republican who is leading the trial, welcomed the temporary stay.

“It is very important that the legal issues involving presidential power be analyzed by the court before transferring more than $400 billion in debt to American taxpayers,” he said.

The case reaching the 8th Circuit is one of many that conservative state attorneys general and legal groups have filed in an attempt to end the debt cancellation plan announced in August by Biden, a Democrat.

Othery ruled about an hour after U.S. Supreme Court Justice Amy Coney Barrett dismissed without explanation an emergency request to suspend the debt relief plan in a separate challenge brought by the Brown County Taxpayers Association, based in Wisconsin.

Biden said the US government will forgive up to $10,000 in student loan debt for borrowers earning less than $125,000 a year, or $250,000 for married couples. Borrowers who received Pell Grants to benefit low-income students will see up to $20,000 of their debt forgiven.

The policy fulfilled a promise Biden made during the 2020 presidential campaign to help debt-ridden former students.

Democrats hope the policy will bolster their support in the Nov. 8 midterm elections in which congressional control is at stake.

Reporting by Eric Beech in Washington and Steve Gorman in Los Angeles; additional reporting by Nate Raymond and Ismail Shakil; Editing by Grant McCool and Lincoln Feast

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