After a US appeals court extended a judge's ruling to block President Joe Biden's student loan forgiveness program has prompted feds to seek other options in providing debt relief to millions of borrowers across the country.
On Monday, the St. Louis-based 8th US Circuit Court of Appeals issued an injunction that prevented the Department of Education from forgiving student loan debt based on Biden's executive order.
Student Loan Forgiveness Program
The ruling is the latest development in a series of legal challenges that Biden's debt relief program is facing. It came in a lawsuit that was filed by the states of Arkansas, Iowa, Kansas, Nebraska, Missouri, and South Carolina.
The six states involved in the lawsuit argued that the US president skirted congressional authority and claimed that the student loan forgiveness program threatens future tax revenues and money earned by state entities that have invested in or service student loans.
On October 21, the court temporarily barred the Biden administration from enacting the student loan forgiveness program's main purpose, relieving debt, while it considered an emergency request for an injunction by the six aforementioned states, as per Reuters.
While the states' lawsuit was dismissed, authorities said that they were appealing that decision. On the other hand, White House spokeswoman Karine Jean-Pierre said in a written statement on Monday that they were confident that their legal authority for the student loan forgiveness program was solid and argued that it was necessary to help borrowers.
She added that the Biden administration will continue to fight what she called baseless lawsuits by Republican officials and special interests. Jean-Pierre said that they will never stop fighting to support the working and middle-class people of the United States.
According to CNBC, Biden's student loan forgiveness program could cancel up to $20,000 in student debt for millions of Americans. The Biden administration had already stopped accepting applications for its debt relief starting on Friday following a Texas federal district judge's ruling.
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Student Loan Debt
The three-judge panel of the appeals court said that the injunction will remain in effect until further order from the court or the Supreme Court of the United States. On the other hand, the Biden administration could seek the Supreme Court in its attempts to restart the debt relief program.
The rulings come as the most challenging part of any party wanting to legally challenge Biden's policy is finding a plaintiff who can prove that they have been harmed by the program. A Harvard law professor, Laurence Tribe, said that such injury is needed to establish what courts call "standing."
The appeals court noted that Missouri had allegedly shown a likely injury in the face from the student loan forgiveness program. It pointed out that a major loan servicer that was headquartered in the state, the Missouri Higher Education Loan Authority (MOHELA), would lose revenue under Biden's plan.
Regardless of the status of Biden's student loan forgiveness program, a project director, Sarah Sattelmeyer, who is studying student loans at New America, a left-of-center think tank, said that new regulations are likely to make easier for borrowers to pay for their student loans and could also protect students from predatory colleges, USA Today reported.
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