Student loan forgiveness still on hold following latest court ruling

President Joe Biden’s plan to provide student loan forgiveness for millions of Americans remained on hold following a federal appeals panel ruling. Monday’s ruling allowed for a stay on the student loan forgiveness program to continue while the court considered an effort to block the plan.

That effort is led by six states: Nebraska, Missouri, Iowa, Kansas, Arkansas and South Carolina. Part of the states’ argument centered around the financial harm the debt cancellation would cause the Missouri Higher Education Loan Authority.

This unanticipated financial downturn will prevent or delay Missouri from funding higher education at its public colleges and universities,” the 8th U.S. Circuit Court of Appeals in St. Louis stated. In a statement on the ruling, Attorney General Doug Peterson, R-Neb., added the ruling “recognizes that this attempt to forgive over $400 billion in student loans threatens serious harm to the economy that cannot be undone.”

“It is important to stop the Biden administration from such unlawful abuse of power,” Peterson said.

The effort from the six states initially failed, after U.S. District Judge Henry Autrey ruled the states failed to establish standing. This case is different than the recent Texas case, in which U.S. District Judge Mark Pittman ruled last week that President Biden had overstepped his authority in creating the debt relief program without congressional approval.

Following the Texas ruling, the White House stopped accepting applications for student loan forgiveness. About 26 million people had applied, and 16 million applications have been approved. However, because of court rulings, none of the relief has actually gone out.

“Courts have issued orders blocking our student debt relief program,” the Education Department said on its federal student aid website. “As a result, at this time, we are not accepting applications. We are seeking to overturn those orders. If you’ve already applied, we’ll hold your application.”

The Associated Press contributed to this report.