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Appeals Court Temporarily Blocks Student Debt Cancellation

Analysts say the conservative-dominated court is breaking procedure to halt debt relief.

Activists rally outside the White House a day after President Biden announced his student loan debt cancellation plan in Washington, DC, on August 25, 2022.

In an unsigned order Friday night, the conservative-dominated Eighth Circuit Court of Appeals temporarily barred the Biden administration from moving ahead with student debt cancellation as judges weigh an effort by Republican attorneys general to block the program.

The court’s one-page order said it decided to grant the GOP officials’ emergency request for an “administrative stay” preventing the Biden administration from “discharging any student loan debt under the cancellation program,” pending further review of the Republican legal challenge early next week.

The order came a day after a district court judge appointed by former President George W. Bush dismissed the GOP states’ lawsuit for lack of standing.

Legal observers questioned the appeals court’s characterization of its Friday order as a “stay,” noting that it doesn’t block the district court judge’s ruling on standing but pauses the Biden administration’s debt cancellation program.

“An actual administrative stay would have halted the district court decision that found no standing,” Slate court reporter Mark Joseph Stern pointed out. “But this order imposes a nationwide injunction against student debt relief. The Eighth Circuit is lying about what it’s doing here to cover up the procedural improprieties.”

While Stern stressed that the Friday order doesn’t mean the court will permanently tank the debt relief program, “it’s not a good sign at all.”

“There’s only one Democratic appointee on the entire court,” he wrote. “It’s easy to see the Republican judges accepting the states’ ridiculous theory of standing.”

The appeals court’s move came after President Joe Biden said that around 22 million people have already signed up for debt cancellation through the newly launched government portal. Earlier this week, the Education Department started reaching out to borrowers who are eligible for automatic debt cancellation under the relief program, which offers up to $20,000 in forgiveness.

Astra Taylor, a co-founder of the Debt Collective, urged people to continue applying for student debt relief despite Friday’s court order.

“Cancellation is legal and it is gonna happen,” Taylor wrote on Twitter. “Don’t panic. Student debt relief isn’t dead. And let this be a reminder. The folks who want to keep us in debt are organized. We need to be too.”