Appeals Court Temporarily Blocks Student Loan Debt Relief Plan as Biden Announces 22 Million Have Applied in First Week

Nearly 22 million individuals applied for the federal government’s student loan forgiveness program in its first week of operation, President Biden said on Friday, the same day that the Court of Appeals for the Eighth Circuit temporarily stopped the program from going into effect, following a lawsuit that was filed by six states.

The lawsuit is one of a number of legal challenges that have been launched to keep the program from going into effect, and the first to obtain any kind of injunction barring the program from forgiving any loans. Briefs from both sides are due early this week and the Appeals Court said it would hear arguments in the case on an “expedited basis.”

The federal government announced in August that it would forgive up to $20,000 in unpaid student loan debt for anyone making less than $125,000 annually. About 45% of income-eligible borrowers will have all of their student loan debt wiped clean, if the plan — which is expected to cost $400 billion — is allowed to move forward. There are about 40 million individuals who are eligible to have some amount of their unpaid student loans forgiven.

Individuals are still allowed to file their applications while the appeal is pending before the Eighth Circuit, the White House said. Miguel Cardona, the Secretary of Education, called the claims by the states “baseless” and said the Biden administration is not deterred.

The states appealed to the Eighth Circuit after a District Court judge in Missouri denied their request for a preliminary injunction, ruling the states lack standing to bring their suit.

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