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Financial Services Law Insights and Observations

8th Circuit temporarily pauses Biden’s student debt relief plan

Courts Appellate Eighth Circuit Student Lending Biden Department of Education Debt Relief Consumer Finance


On October 21, the U.S. Court of Appeals for the Eighth Circuit issued an order granting an emergency motion filed by state attorneys general from Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina to temporarily prohibit the Biden administration from discharging any federal loans under its student debt relief plan (announced in August and covered by InfoBytes here). The states’ motion requested an administrative stay prohibiting President Biden from discharging any student loan debt under the cancellation plan until the appellate court issues a decision on the states’ motion for an injunction pending an appeal. The order follows an October 20 ruling issued by the U.S. District Court for the Eastern District of Missouri, which dismissed the states’ action for lack of Article III standing after concluding that the states—which attempted “to assert a threat of imminent harm in the form of lost tax revenue in the future”— failed to establish imminent and non-speculative harm sufficient to confer standing. “It should be emphasized that ‘standing in no way depends upon the merits of the Plaintiff[s’] contention that the particular conduct is illegal,’” the district court said. “While Plaintiffs present important and significant challenges to the debt relief plan, the current Plaintiffs are unable to proceed to the resolution of these challenges.” The 8th Circuit ordered an expedited briefing schedule on the states’ motion for an injunction pending appeal, which required both parties to file responses the same week the order was issued.