A panel of judges from the 8th U.S. Circuit Court of Appeals on Monday halted President Joe Biden’s student loan forgiveness program, the latest in a series of legal setbacks for the plan. The program stopped accepting applications last week after a separate federal judge in Texas decided that the loan forgiveness plan is unconstitutional.
Monday’s ruling – handed down by three judges appointed by Republican presidents, including two appointed by former President Donald Trump – came after six states led by Missouri sued to stop the debt forgiveness program, arguing that they would lose tax revenues from loan servicers. Reversing an earlier ruling, the judges found that Missouri would in fact faces financial losses, and therefore had standing to sue – a key issue in the legal cases seeking to end the loan forgiveness program.
Estimated to cost roughly $400 billion, Biden’s plan would forgive up $20,000 in student loan debt per borrower, subject to income limits. The new ruling halts the program nationally until the issue is resolved in the courts. “The injunction will remain in effect until further order of this court or the Supreme Court of the United States,” the appeals court said.