A federal appeals court has halted the rollout of President Joe Biden’s student loan forgiveness program Friday just days after the government began accepting applications from borrowers to forgive as much as $20,000 in student loan debt.
The 8th U.S. Circuit Court of Appeals granted an emergency petition to pause the loan forgiveness plan, Reuters said in a report.
The federal appeals court’s decision comes in a case brought by six Republican-led states that asked for a preliminary injunction to halt the policy after a district court dismissed the case.
The district court’s order does not prevent borrowers from applying for student debt relief or bar the Biden administration from reviewing applications, according to White House Press Secretary Karine Jean-Pierre.
“We encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has,” Jean-Pierre said.
“It is important to note that the order does not reverse the trial court’s dismissal of the case or suggest that the case has merit,” she added. “It merely prevents debt from being discharged until the appeals court makes a decision.”
Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina allege that Biden’s plan evaded congressional authority and threatened the states’ future tax revenues.
The appeals court has given the administration until Monday to respond to the state’s request, and the states will have until Tuesday to reply to that response.
Biden has said that the Department of Education will provide up to $10,000 in federal student debt cancellation for individuals with annual income below $125,000 or married couples with a combined income of $250,000 or less.
Up to $20,000 in debt cancellation will be available to Pell Grant recipients.
Earlier, he announced the pause on federal student loan repayment would be extended one final time through Dec. 31 to ensure a smooth transition and prevent unnecessary defaults.
Photo: Cameron Smith photo, courtesy of White House (Flickr).
Image and article originally from www.benzinga.com. Read the original article here.