US court puts a stay on Biden’s student loan forgiveness plan

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Days after launching the application portal for student-loan forgiveness, the Biden administration has been dealt a blow. Reportedly, a US appeals court on Friday issued a stay on the plan, temporarily blocking the federal government from cancelling any loans. 

The eighth US Circuit Court of Appeals stayed the decision citing it was considering a request for an injunction under a lawsuit filed by a coalition of six Republican-led states viz. Arkansas, Iowa, Kansas, Nebraska, Missouri and South Carolina. 

Watch | Joe Biden’s student loan deductions to affect already skyrocketing inflation?

Ever since the announcement regarding the programme was made, Republicans continue to claim that it is a waste of government funds that could be put to better use.

White House press secretary Karine Jean-Pierre sounded optimistic despite the temporary halt and encourage the students to enroll themselves on the list. 

“We encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has,” said Jean-Pierre.

“It is important to note that the order does not reverse the trial court’s dismissal of the case or suggest that the case has merit,” she added. “It merely prevents debt from being discharged until the (appeals) court makes a decision.”

Unveiled in August, the programme will provide a $10,000 relief for borrowers with salaries less than $125,000. For recipients of Pell Grants, the relief doubles to $20,000.

As per news reports, the plan is going to cost the government an estimated $400 billion. 

Read more: Joe Biden’s ‘game-changing’ student loan forgiveness progamme launched; 8 million applications in already

As reported by WION, earlier this week, Biden launched the portal amid much fanfare and said that eight million Americans had already enrolled in the programme during its soft launch.

“The new student loan application is now open. If you have federal student debt, please visit Studenthelp.gov. It’s easy, simple and fast and it’s a new day for millions of Americans all across our nation,” said Biden. 

(With inputs from agencies)

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