NNI - Court temporarily blocks Biden's student loan forgiveness program

A Federal appeals court on Friday issued a stay that temporarily blocks the Biden administration's plan to forgive billions of dollars in federal student loans.

The stay is in effect while the Eighth Circuit Court of Appeals considers a motion from six Republican-led states to block the loan forgiveness program.

The Biden administration has until Monday, 5:00 PM CDT to respond and a deadline of Tuesday, 5:00 PM CDT for any reply from the appellants, the Associate Press resported.

On Thursday a U.S. District Judge in St. Louis ruled that the states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina didn't establish standing in the case. As  such, "the Court lacks jurisdiction to hear the case," Judge Henry Autrey said in the ruling.

The stay comes a week after borrowers started applying for the forgiveness program. Earlier Friday, Biden said almost 22M people have already applied for federal student loan relief.

Student loan-related stocks include SLM Corp. ( NASDAQ: SLM ), Navient ( NASDAQ: NAVI ), SoFi Technologies ( NASDAQ: SOFI ) and Nelnet ( NYSE: NNI ).

In August, Biden announced the plan to forgive $10K of student debt for borrowers who earn less than $125K per year, with Pell Grant recipients eligible for up to $20K of loans forgiven.

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