Student loan forgiveness is on hold – for now

A federal appeals court on Friday temporarily stopped the Biden administration from moving forward with its plan to forgive up to $20,000 worth of federal student-loan debt for millions of Americans.

⚖️🎓 What’s going on?... In a one-page order, the Eighth Circuit Court of Appeals said the halt will remain in place while it considers a lawsuit brought by six Republican AGs to block the program’s implementation.

• The GOP-led suit was previously dismissed last Thursday by a Missouri federal judge, who ruled the plaintiffs didn’t have standing to sue since they didn’t demonstrate the policy directly harms them. The judge’s decision was appealed to a higher court.

🤔 How does this affect borrowers?... The latest court order doesn’t stop eligible Americans from applying for debt relief, nor does it restrict the government from processing those applications. The only action that can’t occur (for now) is the actual forgiving of debt.

• The Biden admin previously said student-loan debt wouldn’t be forgiven prior to October 23 (yesterday). The court order to halt the process was handed down two days before that date, meaning none of the ~22 million applicants have seen their debt wiped so far.

👀 Looking ahead… Arguments from both sides of the ongoing lawsuit are due no later than tomorrow afternoon, with the court’s decision expected shortly afterwards.

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