President Joe Biden’s Plans to Forgive Student Loan Debt Millions of borrowers were given another legal loss on Monday.
A three-judge panel of the US Court of Appeals for the 8th US Circuit in St. Louis decided. Days after a federal judge in Texas blocked the program, He claimed that Congress had taken away the power to make laws. The Texas case has been appealed, and the administration will likely appeal the Eighth Circuit’s decision as well.
The plan cancels $10,000 of student loan debt for individuals with annual incomes less than $125,000 or households with incomes less than $250,000. Pell grant recipients who typically demonstrate more financial need can additionally receive $10,000 in debt forgiveness. Cancellation applies to federal student loans used to attend undergraduate and graduate school, and Parent Plus loans.
The Congressional Budget Office says the program will cost about $400 billion over the next 30 years.
Federal Judge Oct. 20 Allow the program to proceed, However The next day’s 8th circuit is temporarily put on hold He believes Nebraska, Missouri, Iowa, Kansas, Arkansas, and South Carolina are trying to block the loan forgiveness plan.
A new ruling from a committee made up of three Republican nominees, one appointed by President George W. Extend the hold until
Part of state claim The Missouri Department of Higher Education Loans could suffer financial damage from debt cancellation.
“This unexpected financial downturn will prevent or delay the funding of higher education in public colleges and universities by Missouri,” said the Eighth Circuit Court’s ruling.
Republican Nebraska Attorney General Doug Peterson said in a statement that the ruling “will threaten serious and irreversible damage to the economy in this attempt to allow more than $400 billion in student loans. It is important that the Biden administration stops doing such an unjustified abuse of power.”
White House Press Secretary Carine Jean-Pierre said in a statement that the administration believes the program has legal mandate and “must help borrowers most in need as they recover from the pandemic.” said.
“The administration will continue to fight these baseless lawsuits by Republican officials and special interest groups and will never stop fighting to support working and middle-class Americans,” the statement added.
Both federal actions centered around the Higher Education Relief and Opportunity Act of 2003, commonly known as the HEROES Act. It was enacted after the 9/11 terrorist attacks and allowed the Secretary of Education to waive or change the terms of federal loans in times of war or a national emergency.
Administration lawyers argue that the COVID-19 pandemic has sparked a national emergency that has led to a surge in student loan defaults over the past two-and-a-half years.
But in Thursday’s Texas ruling, Fort Worth-based Trump-appointed U.S. District Judge Mark Pittman said the HEROES ACT did not provide the approval the Biden administration claimed.
Karine Jean-Pierre says 26 million people have applied for debt relief so far and 16 million have already been approved. After the ruling in Texas, the Department of Education said, “If we win the case in court, we will expedite their remedies.”
Legal issues have led to confusion over whether borrowers whose debts were expected to be written off should resume payments on January 1, when the suspension caused by the COVID-19 pandemic expires. is occurring.
Economists are concerned that many people have not yet recovered financially from the pandemic, and many will be late on their bills if borrowers who expected debt cancellation were asked to pay instead. and may default on its obligations.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
https://www.ksat.com/news/politics/2022/11/14/appeals-court-ruling-keeps-biden-student-debt-plan-on-hold/ Appeals court ruling puts Biden’s student debt plan on hold