Judge rejects attempt to block student loan relief program

JUDGE REJECTS PLAN TO STOP STUDENT LOAN RELIEF Expand this image to reveal the caption
Seth Wenig / AP

MO. ST. LOUIS — An attempt by six Republican-led states to stop the Biden administration’s plan to cancel student loan debt for tens of millions of Americans was rejected by a federal judge on Thursday.

Because the six states – South Carolina, Nebraska, Missouri, Arkansas, Iowa, and Kansas — failed to demonstrate they had standing, U.S. District Judge Henry Autrey in St. Louis ruled that “the Court lacks authority to hear this action.”

The states will appeal, according to Suzanne Gage, a spokesperson for Doug Peterson, attorney general of Nebraska. The states “continue to feel that they do, in fact, have standing to raise their critical legal objections,” she said in a statement.

The government of Democratic President Joe Biden will forgive up to $20,000 in student loan debt for a sizable percentage of debtors, he announced in August. Prior to the November midterm elections, the news quickly turned into a significant political issue.

The lawsuit brought by the states is one of several. Earlier on Thursday, Wisconsin taxpayers’ group’s appeal to halt the debt cancellation scheme was denied by Supreme Court Justice Amy Coney Barrett.

When rejecting the appeal from the Brown County Taxpayers Association, Barrett, who is in charge of emergency appeals from Wisconsin and surrounding states, made no comments. In its Supreme Court filing, the group said that it required an urgent ruling since the administration may start canceling outstanding student loans as early as this coming Sunday.

Attorneys for the administration said that the Department of Education has “extensive power to regulate the federal student financial assistance programs” in the case filed by the states. According to a court document, in times of war or a national emergency, the secretary of education is permitted to waive or alter the conditions of federal student loans under the 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act.

The filing said, “COVID-19 is such an urgency.”

Over the next three decades, the program is expected to cost nearly $400 billion, according to the Congressional Budget Office. At a hearing on October 12, James Campbell, an attorney with the Nebraska attorney general’s office, informed Autrey that the administration is operating unlawfully in a way that will cost states millions of dollars.

For people making less than $125,000 or households making less than $250,000, the plan would eliminate $10,000 in student loan debt. Receivers of Pell Grants, who often exhibit greater financial need, will also receive a $10,000 debt forgiveness bonus.

Conservative lawyers, Republican legislators, and business-oriented organizations have argued that Biden exceeded his authority by taking such broad action without receiving congressional approval. They referred to it as an unfair government handout for comparatively well-off individuals at the expense of taxpaying citizens who chose not to seek higher education.

According to Chris Nuelle, the plan “would unfairly burden working class families with even more economic hardships,” stated Eric Schmitt, the attorney general of Missouri.
Many Democratic politicians who are up for reelection in difficult races have disavowed the scheme.

After 9/11, the HEROES Act was passed in order to support military personnel. According to the Justice Department, during a national emergency, Biden is permitted by law to lower or eliminate student loan debt. Republicans claim that, in part because the pandemic is no longer considered to be a national emergency, the administration is misapplying the law.

Autrey was informed by Justice Department lawyer Brian Netter that the COVID-19 pandemic’s effects are still being felt. He claimed that during the previous two and a half years, student loan defaults have soared.

Federal student loans taken out for undergraduate and graduate study, as well as Parent Plus loans, are all affected by the cancellation. If their loans were disbursed before to July 1, then current college students are eligible.

According to the government, the plan makes 43 million debtors eligible for some debt forgiveness, with 20 million potentially receiving full debt forgiveness.

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