A federal appeals court on Monday blocked the Biden administration’s student loan forgiveness plan, placing yet another obstacle in the way of a program that had promised to forgive up to $20,000 in student debt for about 40 million Americans.
The ruling from the 8th Circuit Court of Appeals comes in response to a lawsuit jointly filed six Republican-led states that argued the Biden administration was overstepping its executive powers. The litigation also alleged that Missouri’s loan servicer would face a “number of ongoing financial harms” if the loans were forgiven and that the other states behind the suit would also see a disruption in revenue to their coffers.
It marks the second court ruling blocking the White House’s debt-relief program since a federal judge in Texas on Thursday blocked the program and declared it “unlawful.”
On Monday, the 8th Circuit ruled that Missouri is likely to be harmed if the debt forgiveness plan moves forward because the Missouri Higher Education Loan Authority (MOHELA) would suffer a financial blow “if a substantial portion of its accounts are no longer active” due to the Biden plan.
That, in turn, would impact Missouri’s ability to fund higher education at its public colleges and universities, the ruling said.
“Given MOHELA’s national role in servicing accounts, we discern no workable path in this emergency posture for narrowing the scope of relief,” the court stated.
The Biden administration can appeal the decision to the Supreme Court.
The decision comes after the 8th Circuit Court of Appeals in October temporarily blocked the student loan forgiveness program in response to an emergency motion brought by attorneys for the six Republican-led states.
—This is a developing story.
