Student loans

U.S. court extends block on Biden’s student loan forgiveness plan

Nov 14 (Reuters) – A U.S. appeals court has extended a ban on President Joe Biden’s administration carrying out its plan to write off hundreds of billions of dollars in student loan debt at the request of six Republican-led states, a court filing revealed Monday. .

The United States Court of Appeals for the 8th Circuit, based in St. Louis, has issued an injunction prohibiting the United States Department of Education from writing off student loan debt under Biden’s plan to provide a “life-changing relief” to tens of millions of borrowers.

On Oct. 21, the court temporarily barred the Biden administration from discharging student loans while it considers an emergency request from the six states for an injunction. The States’ case was dismissed, although they are appealing that decision.

Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina say Biden’s plan circumvented congressional authority and threatens future state tax revenue and entity-earned money governments that invest in or manage student loans.

But on Oct. 20, U.S. District Judge Henry Autrey in St. Louis dismissed the states case, saying that while it raises “significant and significant challenges to the debt relief plan,” they don’t had no legal status.

The nonpartisan Congressional Budget Office calculated in September that debt cancellation would eliminate about $430 billion of the $1.6 trillion in unpaid student debt and that more than 40 million people were eligible to benefit. .

The plan provides for forgiveness of up to $10,000 in student loan debt for borrowers earning less than $125,000 a year, or $250,000 for married couples. Borrowers who received Pell Grants to benefit low-income students will have up to $20,000 of their debt forgiven.

The policy fulfilled a promise Biden made during the 2020 presidential campaign to help debt-ridden former students. Democrats hope the policy will bolster their support in the Nov. 8 midterm elections in which congressional control is at stake.

Several lawsuits by attorneys general and conservative legal groups have been filed challenging the plan, though plaintiffs have struggled to establish that they were harmed by it in such a way that they have standing to sue. .

Reporting by Nate Raymond in Boston; Editing by Josie Kao and Susan Heavey

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