A Biden Administration debt relief plan that could cancel billions in student loans was halted Friday by a federal appeals court.
The US Court of Appeals for the Eighth Circuit granted a GOP-led state coalition’s request for the court to temporarily block the program while the US Education Department appeals a lower court ruling against the plan.
The decision Friday supersedes an administrative stay the Eighth Circuit put in place in July. The ruling has the same effect as the stay—temporarily barring President Joe Biden’s Education Department from administering the program while the state coalition fights for the program to be permanently struck as unconstitutional.
The Education Department rule implementing the plan allows borrowers to enroll in income-driven repayment plans that lower their monthly federal student loan bills to as low as zero. The rule also cancels loans after 10 years of payments for those who borrowed $12,000 or less, increasing by 1 year for every additional $1,000 of the borrower’s original principal balance. Both aspects of the plan were blocked by the ruling Friday.
The Eight Circuit said in the per curiam opinion that the states showed “at least a fair chance” of success on the merits of their case, and irreparable harm without the temporary injunction. “The SAVE plan is even larger in scope than the loan-cancellation program at issue in Nebraska,” the opinion says, referencing the US Supreme Court’s 2023 decision tossing Biden’s prior student loan forgiveness plan.
Judges
The case is Missouri v. Biden, 8th Cir., No. 24-02351, 8/9/24.
