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NextGen Magazine


Federal Appeals Court Blocks Student Forgiveness Plan

S.J. Steinhardt
Published Date:
Nov 15, 2022

Student loans graduate books school

President Joe Biden’s plan to forgive student loan suffered another legal setback as a federal appeals court indefinitely blocked its implementation, Bloomberg reported.

The U.S. Court of Appeals for the Eighth Circuit issued the order in response to an appeal from six states to a U.S. District Court for the Eastern District of Missouri ruling that dismissed the states’ argument that they would be financially harmed by the plan in the form of lost tax revenue. The states are Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.

“The Biden administration’s attempt to forgive student loan debt would saddle Americans who did not take out loans or who have paid their loans off already with even more economic woes,” Missouri Attorney General Eric Schmitt said in a statement.

Originally announced in August, the president’s plan called for the cancellation of up to $20,000 in debt for recipients of Pell Grant recipients with U. S. Department of Education (DOE) loans and up to $10,000 in debt for non-Pell Grant recipients. Eligible recipients of the relief must make less than $125,000 as an individual or $250,000 as a household.

The appeals court previously issued an emergency stay on Oct. 21 in response to the states’ request for an injunction. Implementation of the plan has been on hold since then.

Last week, in a separate lawsuit brought by two students who are ineligible for forgiveness under the president’s plan, a federal judge in Texas declared it unlawful under the separation of powers doctrine.

Other legal challenges are pending.