Updated Oct 21, 2022 - Politics & Policy

Appeals court temporarily blocks Biden's student debt relief plan

Photo of Joe Biden speaking

President Biden. Photo: Alex Wong via Getty Images

A federal appeals court temporarily blocked President Biden's student debt relief program on Friday, barring federal debt cancellation as six Republican states' bid to halt the program plays out in court.

Driving the news: The decision comes a day after a lower court tossed out the states' lawsuit, which argues that the Biden administration overstepped its authority with its plan to cancel up to $20,000 per person for more than 40 million people.

  • The coalition of Republican states said in its complaint that the Biden administration should not have established the forgiveness program without going through Congress and claimed that the plan will undercut revenue for state entities that rely on federal student loans for profit.
  • But U.S. District Judge Henry E. Autrey wrote in a 19-page order that the states lack the standing to bright the lawsuit and fail to establish any "ongoing injury" caused by the program.
  • "While plaintiffs present important and significant challenges to the debt relief plan, the current Plaintiffs are unable to proceed to the resolution of these challenges," wrote Autrey, a George W. Bush nominee. "These future lost tax revenues are merely speculative."

The big picture: The order from the U.S. Court of Appeals for the 8th Circuit deals a blow to millions of borrowers who began applying this week after the application website went live.

  • The website has since added a notice that due to the court order, the Department of Education is "temporarily blocked from processing debt discharges." However, borrowers can still submit their applications.

Worth noting: The Supreme Court declined to block Biden's program in a separate case involving a conservative tax group this week.

What's next: The Biden administration has until 6 p.m. EST on Monday to respond in opposition.

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