Appeals court ruling keeps Biden student debt plan on hold

President Joe Biden's plan to forgive student loan debt for millions of borrowers lost another battle in court on Monday when a federal appeals court panel agreed to a preliminary injunction halting the program while an appeal plays out.

The ruling by the three-judge panel from the 8th U.S. Circuit Court of Appeals in St. Louis came days after a federal judge in Texas blocked the program, saying it usurped Congress' power to make laws. The Texas case was appealed and the administration is likely to appeal the 8th Circuit ruling as well.

The debt forgiveness plan would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.

The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans.

A federal judge on Oct. 20 allowed the program to proceed. But the 8th Circuit temporarily put the forgiveness plan on hold Oct. 21 while it considered an effort by the states of Nebraska, Missouri, Iowa, Kansas, Arkansas and South Carolina to block the program.

The new ruling from the panel made up of three Republican appointees — one was appointed by President George W. Bush and two were appointed by President Donald Trump — extends the hold until the issue is resolved in court.

Jim Salter, The Associated Press