U.S. appeals court again blocks Biden debt relief program

The U.S. Court of Appeals for the Eighth Circuit on Monday dealt an additional, and potentially more potent, setback to the Biden administration's student loan relief plan.

A three-judge panel of the appeals court unanimously supported a preliminary injunction that would block the administration's plan to offer debt relief to tens of millions of borrowers. The court had issued a temporary stay last month, but ordered emergency arguments by the government and the six Midwestern states that had sued to block the plan.

In overturning a ruling of a lower federal court, the appeals panel ruled both that the states had legal standing to challenge the debt-relief plan and that letting the administration's policy take effect could be more detrimental than blocking it for some period of time.

"Not only do the 'merits of the appeal before this court involve substantial questions of law which remain to be resolved,' " the court ruled, "but the equities strongly favor an injunction considering the irreversible impact the secretary’s debt forgiveness action would have as compared to the lack of harm an injunction awould presently impose."

The panel also rejected the idea of limiting the injunction to just the six states that directly challenged the policy, as Education Secretary Miguel Cardona had requested in the case of a ruling against the policy.

"We conclude that, at this stage of the litigation, an injunction limited to the plaintiff States, or even more broadly to student loans affecting the States, would be impractical and would fail to provide complete relief to the plaintiffs," the three judges said.

This is a developing story.