U.S. President Joe Biden delivers remarks regarding student loan debt forgiveness within the Roosevelt Room of the White House on Wednesday August 24, 2022.
Demetrius Freeman | The Washington Post | Getty Images
The Biden administration said in a latest court filing Thursday that it can ask the Supreme Court to lift an injunction and permit a significant student loan debt relief program to resume.
The filing got here three days after the federal appeals court for the eighth Circuit in St. Louis issued a nationwide injunction temporarily barring this system.
That ruling by the appeals court, which shall be the goal of the planned request to the Supreme Court, was the most recent 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 earlier within the month after a federal district judge in Texas struck down its plan last week, calling it “unconstitutional.”
The court filing on Thursday asked the federal appeals court for the fifth Circuit to remain the Texas judge’s order pending an appeal by the Department of Justice of the ruling. The filing says the judge “lacked jurisdiction to enter an order.”
And the filing says, “the federal government shall be filing an application with the Supreme Court to vacate a separate injunction against the [Education] Secretary’s motion entered by the Eighth Circuit earlier this week.”
Earlier Thursday, the Biden administration revealed updated guidelines that may make it easier for those combating their student debt to discharge it in bankruptcy.
Within the case at issue within the eighth Circuit, one other federal judge rejected the challenge to the debt relief program brought by the six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina, The judge ruled that while the states raised “vital and significant challenges to the debt relief plan,” they ultimately lacked legal standing to pursue the case.
Standing refers to the concept that an individual or entity shall be affected by the motion they seek to challenge in court.
The GOP-led states appealed after their lawsuit was denied.
A 3-judge panel on the eighth Circuit then ruled Monday that Missouri had shown a probable injury from the administration’s program, stating 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.
The Biden administration has defended the legality of its plan and vowed to maintain fighting the challenges.
“We consider strongly that the Biden-Harris Student Debt Relief Plan is lawful and crucial to provide borrowers and dealing families respiration room as they get well from the pandemic and to make sure they succeed when repayment restarts,” Education Secretary Miguel Cardona said in an announcement.
“Amidst efforts to dam our debt relief program, we are usually not standing down.”
A top official on the U.S. Department of Education recently warned that there could possibly be a historic rise in student loan defaults if its forgiveness plan will not be allowed to undergo.
“These student loan borrowers had the reasonable expectation and belief that they might not need to make additional payments on their federal student loans,” U.S. Department of Education Under Secretary James Kvaal wrote in a court filing.
“This belief could stop them from making payments even when the Department is prevented from effectuating debt relief,” he wrote.
“Unless the Department is allowed to offer one-time student loan debt relief,” he went on, “we expect this group of borrowers to have higher loan default rates attributable to the continuing confusion about what they owe.”
