Federal court puts temporary hold on Biden’s student loan forgiveness plan

Wednesday, October 26, 2022 | Tag Cloud Tags: ,

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – A federal court on Friday granted an emergency stay order to temporarily block US President Joe Biden’s student loan forgiveness plan, Yahoo News reports.

The debt forgiveness plan would cancel $10,000 in student loans for borrowers making less than $125,000 a year, or $250,000 for married couples’ lower-income college students who received Pell Grants, which will have up to $20,000 of their debt canceled. Biden’s plan is expected to cost around $400 billion, the nonpartisan Congressional Budget Office has said.

The October 21 emergency order was requested by Republican-led states Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina, Yahoo News reports. The six states are challenging the loan forgiveness plan on the grounds that Biden bypassed Congress and that his plan threatens state revenues and threatens profits from state entities that invest in or service loans.

The states’ lawsuit was previously dismissed when a district judge on Thursday cited a lack of “the necessary legal standing to pursue the case,” Yahoo News said. Friday’s emergency order puts a hold on Biden’s plan until the 8th US Circuit Court of Appeals has considered the plaintiffs’ appeal, Yahoo said.

White House press secretary Karine Jean-Pierre said in a statement that Americans may still apply for their debt to be forgiven while the case is ongoing, Yahoo said.

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