Biden’s plan to cancel student loans is put on hold for now by an appeals court.
The program has been put on hold while the court looks into a request from six states led by Republicans.
A federal appeals court has put a hold on Joe Biden’s plan to cancel billions of dollars in federal student loans while it looks into a request from six states led by Republicans to stop the program.
The temporary stay was issued by the eighth circuit court of appeals on Friday. It told the Biden administration not to do anything with the program while the appeal is being looked at.
Biden said on Friday at Delaware State University, a historically black university where most students get federal Pell Grants, that almost 22 million people have applied for loan relief in the week since his administration made the online application available.
The plan, which was announced in August, would let people with incomes of less than $125,000 or households with incomes of less than $250,000 get rid of $10,000 in student loan debt. People who get Pell Grants, who usually have more financial problems, will get an extra $10,000 in debt relief. The plan gives 43 million borrowers the chance to get some or all of their debt forgiven. The administration says that 20 million borrowers could have all of their debt erased.
The program will cost about $400 billion over the next 30 years, according to the Congressional Budget Office. At a hearing on October 12, an attorney for the Nebraska attorney general’s office named James Campbell told US District Judge Henry Autrey that the administration is doing things that are against the law and will cost states millions of dollars.
The plan to help people with their debts became a big political issue right away, just before the midterm elections in November.
Conservative lawyers, Republican lawmakers, and business groups have said that Biden went beyond his authority by taking such sweeping actions without getting Congress’s approval. They said it was an unfair government handout to people with money at the expense of taxpayers who didn’t go to college. Many Democratic lawmakers who are running for re-election this year have moved away from the plan.
Biden slammed Republicans on Friday for criticizing his aid program, calling their anger “false and hypocritical.” He said that some Republican officials had their debts and loans for disaster relief wiped out.
Six states sued in September. They were Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina. Lawyers for the government said that the Department of Education has “broad authority” to run the federal programs that help students pay for college. In a court filing, it was said that the 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act, lets the secretary of education change or cancel the terms of federal student loans during war or a national emergency.
In the filing, it said, “Covid-19 is such an emergency.”
At the 12 October hearing, Brian Netter, an attorney for the Department of Justice, told Autrey that the effects of the Covid-19 pandemic are still being felt. He said that the number of people who don’t pay back their student loans has gone through the roof in the last two and a half years.
There have been other lawsuits that also tried to stop the program. On Thursday, supreme court justice Amy Coney Barrett turned down an appeal from a group of Wisconsin taxpayers who wanted to stop the program to cancel debts.