On Friday, a federal appeals court was blocking President Biden’s student loan forgiveness program.ruling in lower court their september lawsuit Stopping debt relief programs lacks status.
In their appeals, plaintiffs including Iowa, Kansas, Missouri, Nebraska, South Carolina and Arkansas said the forgiveness program would be irreparable to their state’s student loan program damage.
“The State of Missouri suffers from the economic loss of cancellations,” the motion reads.
They stayed not on merit, but to allow for a further briefing on the issue next week.
This is also after the U.S. Supreme Court on Thursday reject urgent appeal A group of taxpayers in Wisconsin also challenged the plan in a separate lawsuit.
President Biden Announced in August His administration is cancelling up to $20,000 in student loan debt for millions of Americans. Under the new plan, nearly 20 million people will be eligible for full debt cancellation.
Borrowers who receive Pell Grants for low- and moderate-income households can receive debt relief of up to $20,000, while other borrowers can receive up to $10,000 in relief.
Only individuals with an income of less than $125,000 in 2020 or 2021 and married couples with a combined annual income of less than $250,000 are eligible for loan forgiveness under the program.
Earlier this week, the U.S. Department of Education Officially launched Its debt relief application website. It’s unclear how Friday’s ruling will affect the site or the application process. However, White House press secretary Karin Jean-Pierre said in a statement late Friday that “the interim order will not prevent borrowers from applying for student debt relief.”
“It also does not prevent us from reviewing these applications and preparing to transmit them to loan servicers,” Jean-Pierre said. “It’s also important to note that this order does not overturn the trial court’s decision to dismiss the case, nor does it indicate that the case is meritorious. It simply prevents the debt from being discharged until the court makes a decision.”
U.S. Secretary of Education Miguel Cardona reiterated that sentiment in his own statement, saying: “Today’s interim decision does not deter the Biden administration’s efforts to provide borrowers with the opportunity to apply for debt relief, nor does it Would prevent us from reviewing the millions of applications we have. Received.”
— Robert Legare contributed reporting.