President Joe Biden’s student loan forgiveness program, which faces a challenge from six states as being unconstitutional, has been put on hold.
The Eighth Circuit Court of Appeals on Friday blocked the Biden administration from canceling any debts until it hears from both the Biden administration and the states on the issue, according to NPR.
The plan forgives up to $10,000 in student loan debt for those making less than $125,000 a year, or $250,000 for married couples. Pell Grant recipients would be eligible to have up to $20,000 forgiven, according to Reuters.
Many of my Dem friends who voted for him & paid off their student loans are angry at him for unilaterally forgiving student debt when they had paid off theirs and are now starting from zero. There’s an insane amount of unfairness in what he did with student loans.
— Walter Sobchak (@WalterSobchakSr) October 21, 2022
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The crux of the legal case is that the six states involved in the lawsuit — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – say Biden violated the Constitution by enacting the plan without congressional approval, according to The Washington Post.
The Biden administration contends the plan is legal, based on a 2003 law that allows for loan forgiveness in times of national emergencies. The administration claims the COVID-19 pandemic is just such an emergency, a contention the states dispute.
The states further contend that loan cancellation will create economic harm by impacting state investment entities and student loan companies that own debt, according to the Post. That contention is an effort to establish standing in the case. The states’ effort to claim standing — which means they are impacted by the policy — was rejected Thursday in a federal court, prompting the appeal.
Nebraska Attorney General Doug Peterson praised the appellate court’s ruling.
Is Biden’s student loan forgiveness legal?
“We are pleased the temporary stay has been granted,” Peterson said in a statement, the Post reported. “It’s very important that the legal issues involving presidential power be analyzed by the court before transferring over $400 billion in debt to American taxpayers.”
White House press secretary Karine Jean-Pierre said although the administration cannot grant debt relief while the stay is in effect, borrowers can still apply and the administration will process those claims.
Although the appellate court called for the Biden administration to submit briefs Monday and the states on Tuesday, it is unclear when a ruling will be issued.
Time matters, because the pause on student loan payments that began during the pandemic is scheduled to end on Jan. 1. Those who have applied for loan forgiveness could have to pay up if the case is not decided before then.
BREAKING: The 8th circuit court has put a stop to Bidens student loan forgiveness. Great timing, the court is telling Biden & Dems you can’t buy votes before just before midterms & you can’t forgive private debt, it’s unconstitutional. the Dems will appeal & it will go to SCOTUS.
— Tabitha is here (@tabithaishere) October 21, 2022
Next month’s midterm elections are also looming. The cancellation had been expected to be a factor in attracting support for Democrats on the ballot.
Time was also a factor in the appeal.
The states, noting that the time when the administration might approve debt cancellation was fast approaching, argued that once any student loans are canceled, “the states will be unable to remedy the full scope of all the harms they are experiencing,” according to The New York Times.
In their appeal, the states said they are “likely to succeed on the merits” of their case and that they “have raised substantial or close questions on whether they have standing to pursue this case,” the Times reported.
