President Joe Biden’s plan to forgive student loan debt for millions of borrowers was handed another legal loss Monday when a federal appeals court panel agreed to a preliminary injunction halting the program while an appeal plays out.
President Joe Biden’s plan to forgive student loan debt for millions of borrowers was handed another legal loss Monday when a federal appeals court panel agreed to a preliminary injunction halting the program while an appeal plays out.
The ruling by the three-judge panel from the 8th U.S. Circuit Court of Appeals in St. Louis came days after a federal judge in Texas blocked the program, saying it usurped Congress’ power to make laws. The Texas case was appealed and the administration is likely to appeal the 8th Circuit ruling as well.
The plan would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven. The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans.
The Congressional Budget Office has said the program will cost about $400 billion over the next three decades.
A federal judge on Oct. 20 allowed the program to proceed, but the 8th Circuit the next day temporarily put it on hold while it considered an effort by the states of Nebraska, Missouri, Iowa, Kansas, Arkansas and South Carolina to block the loan forgiveness plan.
