The US 8th Circuit Court of Appeals, based in St. Louis, has issued an injunction preventing the U.S. Department of Education from writing off student loan debt under Mr. Biden’s plan to offer “life-changing relief” to tens of millions of borrowers.
On October 21, the court temporarily barred the Biden administration from writing off student loans while it considers a request for an emergency injunction from the six states. The states were denied, but 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 revenues and entity-earnings governments that invest in or administer student loans.
But U.S. District Judge Henry Autrey St. Louis on Oct. 20 dismissed the states’ case, saying that while they had raised “significant and substantial challenges to the debt relief plan,” they had not stood.
In September, the nonpartisan Congressional Budget Office calculated that debt forgiveness would eliminate about $430 billion of the $1.6 trillion in outstanding student debt and that more than 40 million people could benefit.
The plan will erase 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 for low-income college students will have $20,000 worth of debt forgiven.
The policy responds to a pledge made by Biden during the 2020 presidential campaign to help debt-ridden former college students. Democrats hope the policy will bolster their support in the Nov. 8 midterm elections, where control of Congress hangs in the balance.
Several lawsuits by conservative attorney generals and legal groups have been filed to challenge the plan, though plaintiffs have struggled to establish that they were harmed by it in such a way that they had standing to sue.