Appeals Court Temporarily Halts Biden Student Debt Cancellation

The Appeals Court has temporarily halted the Biden administration’s student debt forgiveness plan until the case is resolved. Republican-led states had filed an emergency lawsuit against the federal government to stop the program from going forward. The court said it needed more time to make a final judgment. The ruling could affect millions of borrowers.

The lawsuit argued that the Obama administration did not have the legal authority to take such action, since it has not sought the approval of Congress. It also said that the plan would harm state investment entities and student loan companies. The state attorneys general and conservative legal groups filed the lawsuits.

Despite the legality of the proposal, the White House still has a legal argument to support its plan. The plan offers $10,000 in debt forgiveness to federal student loan borrowers and $20k in debt relief to borrowers who receive Pell Grants. The Biden administration argues that the program is legal, because the Education Secretary has the power to modify student loans during a national emergency.

On Oct. 23, the Biden administration had promised not to clear the debt before mid-November. However, the legal issues mean that the Biden administration has been unable to fulfill its promises. While the plan is temporarily halted, the program is expected to resume payments on Jan. 1. The federal student debt cancellation program could have an impact on millions of American citizens.