The Court of Appeal temporarily puts the student loan forgiveness plan on hold

A federal appeals court on Friday blocks President Biden’s student loan forgiveness program. The 8th Circuit Court of Appeals issued a temporary stay in response to an emergency case brought by lawyers for several Republican-led states after a lower court ruled that their trial in September to stop the debt forgiveness program was missing standing.

In their appeal, the plaintiffs — who include Iowa, Kansas, Missouri, Nebraska, South Carolina and Arkansas — said the forgiveness program will irreparably harm their states’ student loan programs.

“Missouri is harmed by the economic losses caused by the cancellation,” the motion read.

Those stays are not based on the merits, but allow for further briefings on the issue next week.

It also comes after the US Supreme Court on Thursday rejected an emergency appeal by a group of Wisconsin taxpayers who had also challenged the plan in a separate lawsuit.

President Biden announced in August that his administration is canceling up to $20,000 in student loan debt for millions of Americans. Nearly 20 million people will be eligible to have their debt forgiven in full under the new plan.

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Borrowers who received Pell Grants, which are for low- and moderate-income families, can have as much as $20,000 in debt forgiven, while other borrowers can get relief of up to $10,000.

Only individuals who earned less than $125,000 in 2020 or 2021 and married couples with combined annual income below $250,000 are eligible for loan relief under the program.

Earlier this week, the US Department of Education formally launched its website for applying for debt relief. It’s unclear how Friday’s ruling will affect the site or the application process. However, White House press secretary Karine Jean-Pierre said in a statement Friday night that the “temporary order does not prevent borrowers from applying for student debt relief.”

“It also does not prevent us from reviewing these applications and preparing them for transfer to loan providers,” said Jean-Pierre. “It is also important to note that the order does not overturn the high court’s dismissal of the case or suggest that the case has merit. It merely prevents debt relief until the court makes a decision.”

— Robert Legare contributed reporting.

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