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| Photo Credit: AP. |
A federal appeals court Friday issued a ruling halting President Joe Biden’s student loan forgiveness program that would cost taxpayers hundreds of billions of dollars. The plan was set to contribute significantly to the U.S. government debt ceiling.
The 8th U.S.
Circuit Court of Appeals granted an emergency petition, blocking the Biden
administration from implementing his loan forgiveness plan for millions of students’
debt until the next court hearing next week, The Washington Times reported.
Six
Republican-led states took the Biden administration to court in September
seeking a ruling to halt the scheme, saying it would further damage the economy
which is currently struggling with soaring inflation and high interest rates
imposed by the Feds.
Mr. Biden’s
plan was set to kick off this weekend.
In August
Mr. Biden announced his ambitious student loan cancellation plan as part of his
campaign promise to provide $10,000 in student debt forgiveness for millions of
Americans. The plan also provides up to $10,000 more for students with the
greatest financial need as well as new measures to lower the burden of
repayment for their remaining federal student debt, The Associated Press
reported.
Under the
proposals, borrowers who earn less than $125,000 a year, or families earning
less than $250,000 would be eligible for the $10,000 loan forgiveness. Recipients of Pell Grants, which are reserved
for undergraduates with the most significant financial need, can get up to
$10,000 in additional cancellations by the federal government.
The
president is extending a pause on federal student loan payments for the “final
time” through the end of 2022, according to The Associated Press.
More than 43
million people have federal student debt with an average balance of $37,667,
The Associated Press quoted federal data. Nearly a third of borrowers owe less
than $10,000, and about half owe less than $20,000. .The plan according to The
White House would erase the federal student debt of about 20 million people.
Earlier this
week the U.S. Supreme Court refused to block the plan after a Wisconsin
taxpayer group issued a petition to Justice Amy Coney Barrett.