ST. LOUIS -- A federal appeals court Friday issued an administrative stay temporarily blocking President Joe Biden's plan to cancel billions of dollars in federal student loans.
The Eighth Circuit Court of Appeals issued the stay while it considers a motion from six Republican-led states -- Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina -- who failed to establish standing to block the loan cancellation program. The stay ordered the Biden administration not to act on the program while it considers the appeal.
It's unclear what the decision means for those who already applied for the relief. The Biden administration promised not to clear any debt before Sunday as it battled the legal challenges, but the soonest it was expected to begin erasing debt was mid-November.
Millions of Americans were expected to get their debt canceled entirely under Biden's plan, but they now face uncertainty about whether they will need to start making payments by Jan. 1 and when payments on federal student loans are expected to restart after being paused during the pandemic.
The 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 will get an additional $10,000 in debt forgiven.
The Congressional Budget Office reported that the program will cost about $400 billion over the next 30 years.
James Campbell, an attorney for the Nebraska attorney general's office, told U.S. District Judge Henry Edward Autrey at an Oct. 12 hearing that the administration is acting outside its authorities in a way that will cost states millions of dollars.
The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans. Current college students qualify if their loans were disbursed before July 1.
The six states sued in September. Lawyers for the administration countered that the Department of Education has "broad authority to manage the federal student financial aid programs."
A court filing stated that the 2003 Higher Education Relief Opportunities for Students Act allows the secretary of education to waive or modify terms of federal student loans in times of war or national emergency.
"COVID-19 is such an emergency," the filing stated.
The HEROES Act was enacted after the Sept. 11, 2001, terrorist attacks to help members of the military.
The Justice Department says the law allows Biden to reduce or erase student loan debt during a national emergency.
Justice Department attorney Brian Netter told Autrey at the Oct. 12 hearing that fallout from the covid-19 pandemic is still rippling. He said student loan defaults have skyrocketed over the past 2½ years.
Other lawsuits also have sought to stop the program. Supreme Court Justice Amy Coney Barrett rejected Thursday an appeal from a Wisconsin taxpayers group seeking to stop the debt cancellation program.
Barrett, who oversees emergency appeals from Wisconsin and neighboring states, did not comment in turning away the appeal from the Brown County Taxpayers Association.
22 MILLION APPLICANTS
President Joe Biden said Friday nearly 22 million people have applied for federal student loan relief in the week since his administration made its online application available -- more than half of the number the White House believes are eligible for the program.
Speaking at Delaware State University, a historically Black university where the majority of students receive federal Pell Grants, Biden touted the first-week statistics since the application was beta-launched last week.
Biden highlighted the ease of the application, which doesn't require users to upload any forms or to create an account.
"Folks, it takes less than 5 minutes," Biden said. He said the "vast majority" of applicants are able to submit for relief from their phones.
Biden blasted Republicans who have criticized his relief program, saying "their outrage is wrong and it's hypocritical."
He added, "I don't want to hear it from MAGA Republican officials" who had millions of debt and pandemic relief loans forgiven, naming GOP lawmakers like Reps. Vern Buchanan and Marjorie Taylor Greene, who received loan forgiveness, and Sen. Ted Cruz, who called some beneficiaries of student loans "slackers."
Asked Biden, "Who the hell do they think they are?"
Information for this article was contributed by Jim Salter and Darlene Superville of The Associated Press.