A federal appeals court dealt a major blow to the Biden administration by denying their request to proceed with the plan to provide student loan forgiveness.
The 5th Circuit Court of Appeals ruled that the program exceeded the president's constitutional limits. Judge Mark Perry of Texas had issued a decision last month that put the program on hold.
A three-judge panel of the 5th Circuit Court of Appeals allowed the suspension of the program to remain in place while it considers the case.
Another lawsuit has been filed against the White House, asking the Supreme Court to overturn a decision by the 8th Circuit Court of Appeals that prevented the program from going forward.
The Washington Post reported that the Justice Department would appeal the 5th Circuit's decision to the Supreme Court if it goes against the White House.
In August, Biden issued an executive order that provided for the reduction of student loan debt for people who make less than $125,000 annually and couples with incomes below $250,000. The eligible individuals were also entitled to receive up to $20,000 in debt forgiveness.
According to Reuters, the cost of the program is estimated to be around $400 billion. Although the exact details of the program are not known, the administration has placed the repayment of student loans on hold. It also extended the freeze on payments that had been made during the pandemic caused by COVID-19.
The program was regarded as an executive branch power grab, according to Judge Michael Pittman of the 5th Circuit. He cited a 2003 law as the reason for his decision. According to USA Today, the law allowed the president to forgive student loans during times of national emergencies or military operations.
The White House had argued that the program was necessary because the COVID-19 pandemic was a national emergency. However, Judge Michael Pittman of the 5th Circuit did not agree with the administration's arguments.