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President Joe Biden’s generous student loan forgiveness plan has been blocked for the second time in less than a week, this time by the 8th Circuit Court of Appeals in St. Louis.
The Federal Court of Appeals was born after six conservative countriesincluding Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina, applied The lawsuit argues that Biden’s plan to cancel the loan damage the state budget revenue. The three-judge panel of the appeals court issued a nationwide order on the plan, meaning the Biden administration cannot write off any debt under the one-time program.
“The injunction will remain in effect until further injunction by this court or the Supreme Court of the United States,” the panel of appellate judges wrote in the ruling.
The judges, all appointed by Republican presidents, said the state of Missouri was in a position to challenge Biden’s debt forgiveness program because revenue may be lost by MOHELAa federal student loan service provider.
“It is assumed that MOHELA derives its revenue from the accounts it serves, and the total revenue that MOHELA recovers will decrease if a significant portion of its accounts cease to function according to the Minister’s plan.” decided to write. “This unforeseen financial downturn will prevent or delay Missouri from funding higher education at public colleges and universities.”
The decision comes just days after a federal district judge in Texas ruled the plan illegal. The Biden administration immediately appealed that ruling and it is now moving to the 5th Circuit Court of Appeals.
Since Biden announced his student loan forgiveness plan at the end of August, it has suffered from numerous lawsuits from conservative and libertarian groups who argue that the forgiveness widely is not fair. Several lawsuits have been dismissed, including the US Supreme Court.
The rulings and ensuing appeals have left tens of millions of borrowers unable to get up to $10,000 to $20,000 to clear their federal student debt. About 16 million borrowers signed up and their forgiveness applications were processed before the US Department of Education was forced to closed the app portal last week. The White House said about 40 million borrowers would be eligible for forgiveness under the parameters it set for the program.
Borrower now confused about what will happen to their loans and how much they will owe in January, when federal payments are set to resume after the COVID-19 payment pause.
The Biden administration is still working to clear student loan debt through other avenues, including retooling the Public Service Loan Forgiveness program and expediting relief for borrowers who have been defrauded by institutions. Their higher education institutions cheat.
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