On Friday, a federal appeals court temporarily delayed President Biden’s student loan debt relief program, prohibiting the government from initiating the debt cancellation it had predicted might begin as early as the next week.
An appeal filed by six Republican-led states, whose lawsuit was rejected by a district court judge for lack of standing, has been granted a stay by the Eighth Circuit.
Any cancellation of debts is halted until the court rules on the states’ injunction request. The court set Monday as the deadline for the government to respond to the submission by the states and Tuesday as the deadline for the states to respond.
The ruling does not change the trial court’s rejection of the complaint, nor does it indicate that the case has validity, White House press secretary Karine Jean-Pierre said late Friday. She added it essentially blocks debt discharge until a judge decides.
She advised debtors to continue submitting applications at studentaid.gov. Since the system began late last week, about 22 million individuals, or more than half of those projected to be eligible, have submitted applications.
Judge Henry E. Autrey of the Federal District Court in St. Louis denied the states’ petition for lack of standing a day before the stoppage.
Although plaintiffs submit critical and substantial issues to the debt relief scheme, ruled Judge Autrey, the existing plaintiffs cannot move forward with resolving these problems.
If you earn less than $125,000 a year or $250,000 a household, Mr. Biden’s plan would forgive $10,000 in federal student loans and $20,000 if you earn Pell grants for low-income families.
In a Friday address at Delaware State University, Mr. Biden criticized the states’ lawsuit, which is primarily seen as the most important of the several legal challenges to his proposal. The Education Department has calculated that the program’s lifetime cost will be $379 billion.
Mr. Biden stated Republican members of Congress and Republican governors are trying everything possible to deny this assistance, including their voters.
In a document sent to the Eighth Circuit court on Thursday night, the suing states maintained their conviction that their claims are likely to win on the merits and that they have raised substantial or close questions on whether they have the standing to bring this action.
Once a debt is canceled, the states will be unable to redress the full extent of all the injuries they are experiencing, according to state attorneys. Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina have filed a lawsuit.
Mr. Biden implemented the debt forgiveness using a 2003 federal legislation that authorizes the education secretary to amend student financial aid programs in conjunction with a war or other military action or national disaster. The Biden administration has maintained that the pandemic is an emergency situation.
Establishing standing — the ability to sue another party for harm in court — was always expected to be a significant obstacle for those opposed to Mr. Biden’s debt relief plan. Several lawsuits filed against the government by individuals and organizations have already been dismissed for lack of standing.
The Biden administration has already reduced its strategy to prevent legal challenges. Late in September, the Department of Education announced that some Federal Family Education Loans could no longer be combined into forgivable direct federal loans. Hundreds of thousands of borrowers believed they were eligible for student loan forgiveness and would not have their debts eliminated due to this modification.
This has dissatisfied borrowers represented by debt relief organizations such as the Debt Collective. Matt Lennartz, a 2010 graduate of Ohio’s Wright State University, took out $27,000 in loans but now owes $42,000 since interest accumulated during his hardship deferment.
Mr. Lennartz, whose wife’s loans are eligible for relief, stated, Financially speaking, he is beyond frustrated at this time. Lennartz said it is ludicrous to a certain degree.
It will be a lifeline for students at Delaware State University, a historically black institution, who will be eligible for assistance if Mr. Biden’s plan is implemented.
Mr. Biden was presented by Zachary Bernard, a student who stated he had taken out loans in 2019 to pay for his tuition and transportation. If Mr. Biden’s proposal is enacted, he will graduate debt-free.
This is breaking down boundaries in our communities and in our minds regarding what we can accomplish in the future, said Mr. Bernard, adding that he and his fellow students may now consider establishing companies and saving for their first houses.