GP: Drained college student
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A federal appeals court Monday issued a nationwide injunction temporarily barring the Biden administration’s student loan debt relief program.
The ruling by the eighth Circuit Court of Appeals in St. Louis is the newest in a series of legal challenges to President Joe Biden’s plan to cancel as much as $20,000 in student debt for thousands and thousands of Americans. The Biden administration stopped accepting applications for its relief on Friday after a federal district judge in Texas struck down its plan Thursday evening, calling it “unconstitutional.”
Monday’s decision by the appeals court got here after six GOP-led states argued in a lawsuit that the loan relief program threatens their future tax revenues and that the plan circumvents congressional authority.
“The injunction will remain in effect until further order of this court or the Supreme Court of the USA,” a three-judge panel of the appeals court said in its ruling.
The injunction will put this system on hold pending an appeal of a lower court ruling that had allowed the debt relief program to go forward. The Biden administration could ask the Supreme Court to lift the injunction.
“We’re confident in our legal authority for the scholar debt relief program and consider it’s mandatory to assist borrowers most in need as they get better from the pandemic,” White House Press Secretary Karine Jean-Pierre said. “The Administration will proceed to fight these baseless lawsuits by Republican officials and special interests and won’t ever stop fighting to support working and middle class Americans.”
Ruling focuses on potential harm to state revenue
A federal judge originally rejected the challenge brought by the six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — saying that while they raised “necessary and significant challenges to the debt relief plan,” they ultimately lacked legal standing to pursue the case.
The important obstacle for those hoping to bring a legal challenge against Biden’s plan has been finding a plaintiff who can prove they have been harmed by the policy. “Such injury is required to ascertain what courts call ‘standing,'” said Laurence Tribe, a Harvard law professor.
The appeals court said that Missouri had shown a possible injury actually from this system, mentioning that a significant loan servicer headquartered within the state, the Missouri Higher Education Loan Authority, or MOHELA, would lose revenue under the plan. Missouri’s state treasury department receives money from MOHELA.
“And since at the very least one party likely has standing, we’d like not address the standing of the opposite states,” the panel concluded.
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Biden’s plan would cancel as much as $20,000 in federal student debt for borrowers who received a Pell Grant, which is a variety of aid available to low-income families. Borrowers without such a grant are eligible for as much as $10,000 in relief. Greater than 30 million persons are projected to profit from the plan.
“Regardless of the eventual final result of this case, it would affect the funds of thousands and thousands of Americans with student loan debt in addition to those Americans who pay taxes to finance the federal government and indeed everyone who’s affected by such far-reaching fiscal decisions,” the panel said in its ruling.
“As such, we approach the motion before us with great care.”
