8th Circuit temporarily pauses student-loan forgiveness program
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The 8th U.S. Circuit Court of Appeals at St. Louis on Friday granted an administrative stay that temporarily pauses the Biden administration’s student-loan debt-relief program.
The stay will remain in place until the 8th Circuit decides whether to grant an injunction pending appeal.
The appeals court acted in a lawsuit by six Republican-led states. U.S. District Judge Henry E. Autrey of the Eastern District of Missouri had dismissed the case, citing a lack of standing.
The state plaintiffs are Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.
The six states had argued in the emergency motion for a stay that they would suffer irreparable harm if the plan is implemented, according to Law360. They say they have standing because the plan will reduce future tax revenue available for states and reduce money available to the Missouri entity ensuring access to student loans, as well as others like it.
Under the debt-relief program, some borrowers are eligible for loan forgiveness of $20,000 on college Pell Grants and $10,000 for other student debt if their loans are held by the U.S. Department of Education. Borrowers aren’t eligible unless their income in either 2020 or 2021 was less than $125,000 per year as an individual or less than $250,000 per year per household.
White House press secretary Karine Jean-Pierre said the ruling does not prevent borrowers from submitting applications or the government from reviewing them.
According to the AP, the “crucial question now is whether the issue will be resolved before Jan. 1, when payments on federal student loans are expected to restart after being paused during the pandemic.”