President Joe Biden’s plan to forgive billions of dollars of student loan debts has been blocked by a court-ordered temporary injunction.
Biden’s plan to forgive certain amounts of student loan debt is projected to cost between $440 billion to $600 billion over the next decade.
The 8th Circuit Court of Appeals in St. Louis granted an appeal on Nov. 14 and issued the injunction, which was previously denied by a district court.
“Whatever the eventual outcome of this case, it will affect the finances of millions of Americans with student loan debt as well as those Americans who pay taxes to finance the government and indeed everyone who is affected by such farreaching fiscal decisions,” the court stated in its ruling. “As such, we approach the motion before us with great care.”
In August, Biden announced his plan to cancel student loan debt for millions of Americans. Individuals making less than $125,000 or households making less than $250,000 could be relieved of $10,000. Pell Grant recipients would have $20,000 in debt forgiven.
“This plan offers targeted debt relief as part of a comprehensive effort to address the burden of growing college costs and make the student loan system more manageable for working families,” the White House said.
The appeal was led by the attorneys general from Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.
“The Eighth Circuit’s thorough analysis of the standing issue confirms that the States have a right to pursue this very important case,” said Nebraska Attorney General Doug Peterson in a statement. “The court also recognizes that this attempt to forgive over $400 billion in student loans threatens serious harm to the economy that cannot be undone. It is important to stop the Biden administration from such unlawful abuse of power.”
“Millions of hardworking Americans have felt the pain of increased inflation and rising prices due to the Biden Administration’s disastrous policies,” stated Missouri Attorney General Eric Schmitt. “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. This is a big win for our Office and for Americans across the country, and we will keep up the fight.”
National student loan debt is currently more than $1.7 trillion. In total, 92% of all student debt comes from federal student loans. Approximately 55% of all students at public, four-year institutions have student loan debt while 57% of students at private, four-year institutions have student loan debt.
“We are confident in our legal authority for the student debt relief program and believe it is necessary to help borrowers most in need as they recover from the pandemic,” said White House Press Secretary Karine Jean-Pierre, per CNBC. “The Administration will continue to fight these baseless lawsuits by Republican officials and special interests and will never stop fighting to support working and middle class Americans.”
The injunction will remain in effect until the United States Supreme Court intervenes.
