Student Loan Forgiveness Program Blocked Following Nationwide Injunction

A Manager and loan forgiveness application form.

Photo: Getty Images

A federal appeals court has issued a nationwide injunction preventing the Biden administration from moving forward with its plan to forgive $10,000 in student loan debt for many borrowers.

Under the plan, individuals making under $125,000 and couples earning less than $250,000 would be eligible to have $10,000 in student loan debt forgiven. In addition, those who received Pell Grants would have up $20,000 in student loans forgiven.

A three-judge panel with the 8th Circuit Court of Appeals in St. Louis determined that Missouri, one of the six GOP-led states suing the Biden administration over the student loan relief program, had shown standing to file the lawsuit because a loan servicer headquartered in the state could suffer financial losses due to the program.

The lawsuit had previously been tossed out by a lower court because none of the states had the standing to sue the Biden administration.

"And since at least one party likely has standing, we need not address the standing of the other states," the judges concluded in their ruling.

The Biden administration can appeal the decision to the Supreme Court.

This is the latest setback for Biden's student loan forgiveness program. Last week, District Judge Mark Pittman struck down the program, calling it an "unconstitutional exercise of Congress's legislative power."

The Biden administration has since paused all new applications for debt relief following the ruling.

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