One of the many challenges to President Biden’s student loan forgiveness plan has come to the forefront. On Friday, U.S. Appeals Court placed a temporary block on the program that forgives up to $20,000 in federal loans for millions of Americans, NPR reports. This is after about 22 million people had applied for relief through the program since the application went live.
This ruling came after the Biden administration’s two wins upholding the forgiveness plan through the court system. U.S. District Judge Henry Edward Autrey dismissed the case led by six Republican states last Thursday because legislatures couldn’t show the policy would cause them “direct and traceable harm.” An emergency appeal to stop Biden’s plan to the Supreme Court by a Wisconsin taxpayer group was rejected by Justice Amy Coney Barrett.
The appeals court has given the Biden administration until today to respond to the state’s request. Republican council would have until the following day to issue its rebuttal. Many of these Republican lawsuits are claiming the Biden administration does not have the legal authority to cancel student loan debt broadly. The Biden administration argues that Congress gave the secretary of education the power to discharge debt in the Heroes act passed in 2003.
White House press secretary Karine Jean-Pierre said in a statement Friday night that the pause doesn’t cancel the entire plan. It merely temporarily stops the loans from being forgiven.
“Tonight’s temporary order does not prevent borrowers from applying for student debt relief at studentaid.gov – and we encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has. It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers.”
A federal appeals court ruling is supposed to come as early as next week. One of the biggest questions is if the federal appeals court will decide to be consistent with other decisions and dismiss this or issue an injunction. If so, that could last up until federal payments are due to resume in January.