USA TODAY US Edition
Another court blocks Biden’s plan to forgive student loans
More than 26 million applied for debt relief
A federal appeals court blocked President Joe Biden’s student loan forgiveness program, further crushing the hopes of more than 26 million Americans who have applied for the relief, discouraging millions more who were eligible for the boost and potentially killing the president’s signature program.
The 8th Circuit Court of Appeals granted an injunction sought by six Republican-led states that argued Biden exceeded his presidential authority when he cited COVID-19 as a national emergency to cancel student loan debt for millions of borrowers. The states also said they would lose out on future tax revenue under Biden’s plan.
It’s the second decision by a federal court blocking the program in a matter of days. A U.S. District Court in Texas blocked the program Thursday in a different case.
There is a chance the program could be revived: The administration can appeal the decision to the Supreme Court, though it’s unclear how the court’s conservative majority would rule.
The appeals court reversed a lower federal court’s decision that ruled the six plaintiff states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – failed to establish standing to bring the challenge.
Can I still apply for the president’s student debt forgiveness plan?
The appeals court ordered a temporary halt of the rollout of Biden’s debt forgiveness plan until a final decision. The White House urged student loan borrowers to apply for relief even amid the uncertainty.
The Education Department has since stopped taking applications following the outcome of the Texas case.
Biden signed an executive order in August to grant the debt forgiveness, fulfilling a campaign promise sought by young voters and progressives.
Biden created the debt relief plan under the HEROES Act, which was passed after 9/11 sparked an Americanled military campaign against terrorism. The act gave the administration authority to forgive student loan debt in association with military operations or national emergencies. The White House cited the COVID-19 pandemic as the national emergency.
Under the president’s plan, borrowers would be eligible for up to $10,000 or $20,000 in debt relief, depending on their income and whether they received a Pell Grant in college.
What the court said
The states questioned that authority and argued they would lose money from future tax revenue and via quasistate agencies that service student loans.
The 8th Circuit specifically upheld the states’ legal standing. The district judge in the case had previously dismissed the case on those grounds, and legal critics said proving standing would be the biggest hurdle for those looking to block the president’s debt relief plan
The judges agreed with the states’ argument that the quasi-state student loan servicer, MOHELA, would suffer as a result of the president’s plan to forgive billions in debt, and that that would affect the state of Missouri.
“This unanticipated financial downturn will prevent or delay Missouri from funding higher education at its public colleges and universities,” the judges wrote.