On Friday night, a federal appeals court issued an administrative stay temporarily blocking President Joe Biden’s plan to forgive billions of dollars in federal student loans.
The Eighth Circuit Court of Appeals issued the stay while it considers a motion by six Republican-led states to block the loan forgiveness program. The suspension ordered the Biden administration not to act on the program while it considers the appeal.
The order came just days after people started asking for loan forgiveness. It was not immediately clear what impact the suspension would have on those who have already applied.
The court set a Monday deadline of 5 p.m. CDT for a response from the Biden administration and a central Tuesday deadline of 5 p.m. for any replays from callers.
On Friday, President Joe Biden encouraged student borrowers to apply for student debt relief online. “It takes less than five minutes,” Biden said. “Applying is as easy as applying while hanging out with your friends or at home watching a movie.”
Lawyers for the Republican-led states had asked the court to reconsider their efforts to block the Biden administration’s program to write off student loan debt.
A notice of appeal to the United States Court of Appeals for the Eighth Circuit was filed Thursday evening, hours after U.S. District Judge Henry Autrey in St. Louis ruled that since the states of Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina have failed to establish standing. , “the Court has no jurisdiction to hear this case”.
Separately, the six states also asked the district court for an injunction restraining the administration from implementing the debt cancellation plan until the appeal process is completed.
Speaking at Delaware State University, a historically black university where the majority of students receive federal Pell grants, Biden said Friday that nearly 22 million people had applied for the loan relief in the week since his administration had made his online application available.
The plan, announced in August, would forgive $10,000 in student loan debt for those earning less than $125,000 or households with incomes below $250,000. Pell Grant recipients, who typically demonstrate greater financial need, will get an additional $10,000 in debt forgiveness.
The Congressional Budget Office said the program would cost about $400 billion over the next three decades. James Campbell, a lawyer for the Nebraska Attorney General’s Office, told Autrey in an Oct. 12 hearing that the administration was acting outside of its powers in a way that would cost the states millions of dollars.
Forgiveness applies to federal student loans used to attend undergraduate and graduate school, as well as Parent Plus loans. Current students are eligible if their loans were disbursed before July 1. The plan makes 43 million borrowers eligible for debt forgiveness, including 20 million who could see their debt wiped out entirely, according to the administration.
The announcement immediately became a major political issue ahead of November’s midterm elections.
Conservative lawyers, Republican lawmakers and business-oriented groups have argued that Biden overstepped his authority by taking such sweeping steps without congressional consent. They called it an unfair government giveaway to the relatively well off at the expense of taxpayers who did not pursue higher education.
Many Democratic lawmakers facing tough re-election contests walked away from the plan.
President Joe Biden introduced the new Digital Hub for Student Loan Forgiveness, where eligible Americans can request forgiveness of some or all of their federal student loan debt. Visit studentaid.gov for more information or to see if you qualify.
Biden on Friday lambasted Republicans who criticized his relief package, saying “their outrage is false and hypocritical.” He noted that some Republican officials have had their debts and pandemic relief loans forgiven.
The six states filed suit in September. Lawyers for the administration countered that the Department of Education has “broad authority to administer federal student financial assistance programs.” A court filing said the Higher Education Student Aid Opportunity Act of 2003, or HEROES Act, allows the Secretary of Education to waive or vary the terms of wartime federal student loans. or national emergency.
“COVID-19 is such an emergency,” the filing reads.
The HEROES Act was enacted after the September 11, 2001 terrorist attacks to help the military. The Justice Department says the law allows Biden to reduce or forgive student loan debt in the event of a national emergency. Republicans argue the administration is misinterpreting the law, in part because the pandemic is no longer considered a national emergency.
Justice Department attorney Brian Netter told Autrey during the Oct. 12 hearing that the fallout from the COVID-19 pandemic was still being felt. He said defaults on student loans have skyrocketed over the past 2 1/2 years.
Other lawsuits have also sought to shut down the program. Earlier Thursday, Supreme Court Justice Amy Coney Barrett denied an appeal by a group of Wisconsin taxpayers seeking to stop the debt forgiveness program.
Barrett, who oversees emergency appeals from Wisconsin and neighboring states, did not comment on the dismissal of the appeal from the Brown County Taxpayers Association. The group wrote in its Supreme Court filing that it needed an emergency order because the administration could begin writing off outstanding student debt as early as Sunday.
Associated Press reporter Darlene Superville contributed from Dover, Delaware.