Court temporarily blocks Biden’s student loan cancellation


On Friday night, a federal appeals court issued an administrative stay temporarily blocking President Joe Biden’s plan to forgive billions of dollars in federal student loans.

What do you want to know

  • On Friday, a federal appeals court temporarily suspended President Joe Biden’s student debt relief plan
  • The Eighth Circuit Court of Appeals issued the stay while it considers a motion by six Republican-led states to block the loan forgiveness program
  • Speaking earlier Friday at Delaware State University, historically black university president Biden said nearly 22 million people had applied for loan relief in the week since his administration took office. had made its online application available.
  • Borrowers are eligible for a rebate of up to $10,000 if they earned less than $125,000 per year in 2020 or 2021, or up to $20,000 for Pell Grant recipients

The Eighth Circuit Court of Appeals issued the stay while it considers a motion by six Republican-led states to block the loan forgiveness program. The suspension ordered the Biden administration not to act on the program while it considers the appeal.

The order came just days after people started asking for loan forgiveness. It was not immediately clear what impact the suspension would have on those who have already applied.

The court set a deadline of 5 p.m. CDT Monday for a response from the Biden administration and a deadline of 5 p.m. CDT Tuesday for any response from the appellants.

A notice of appeal was filed by the states Thursday evening, hours after U.S. District Judge Henry Autrey in St. Louis ruled that since the states of Nebraska, Missouri, Arkansas, Iowa , Kansas and South Carolina failed to establish standing, “the Court has no jurisdiction to entertain this matter.”

Separately, the six states also asked the district court for an injunction restraining the administration from implementing the debt cancellation plan until the appeal process is completed.

Speaking at Delaware State University, a historically black university where the majority of students receive federal Pell grants, Biden said Friday that nearly 22 million people had applied for the loan relief in the week since his administration had made his online application available.

Under the plan, which was announced in August, borrowers are eligible for a rebate of up to $10,000 if they earned less than $125,000 a year in 2020 or 2021, or up to $20,000 for Pell Grant recipients.

The Congressional Budget Office said the program would cost about $400 billion over the next three decades. James Campbell, a lawyer for the Nebraska Attorney General’s Office, told Autrey in an Oct. 12 hearing that the administration was acting outside of its powers in a way that would cost the states millions of dollars.

Biden on Friday described debt relief as a “game changer” for millions of working and middle class Americans, especially borrowers of color.

“We’re hearing from people all over the country. Over 10,000 students have written me letters so far,” Biden said. “It’s about as easy to apply as signing up while hanging out with your friends or at home and watching a movie.”

Of the roughly 40 million Americans eligible for student loan relief, more than 60% are Pell grant recipients.

Additionally, 71% of black borrowers are Pell recipients, along with 65% of Latino borrowers.

The Biden administration has highlighted the fact that 90% of the relief will go to Americans earning less than $75,000 a year.

“Our student loan plan lowers costs for Americans as they recover from the pandemic, to give everyone a little more breathing room,” the president said Friday. “I want it to be clear who will benefit the most: working people, middle class people.”

The announcement immediately became a major political issue ahead of November’s midterm elections.

Conservative lawyers, Republican lawmakers and business-oriented groups have argued that Biden overstepped his authority by taking such sweeping steps without congressional consent. They called it an unfair government giveaway to the relatively well off at the expense of taxpayers who did not pursue higher education.

Some Democratic lawmakers facing tough re-election contests have distanced themselves from the plan.

President Biden on Friday renewed criticism from Republicans who sharply attacked the student loan relief plan as costly and unfair, describing some of them as hypocrites for getting pandemic relief loans canceled. He called out Texas Sentor Ted Cruz for saying the loan relief would benefit “lazy baristas.”

“Who the hell do they think they are? Biden said.

“We can afford to help students,” he added, pointing to his work to reduce the federal deficit.

Republicans, meanwhile, also pointed to the cost of the plan, which is expected to cost $400 billion, according to the Congressional Budget Office.

“He wants to give [relief] to those who went to Ivy League schools and have high degrees,” Arkansas Attorney General Leslie Rutledge, who leads the GOP states challenge to Biden’s agenda, said in an interview. with Fox News earlier this month.

“Putting this debt on the backs of hard-working Americans — and our plumbers and mechanics, machinists and nurses and teachers — and so it’s against the law…and it’s patently unfair,” she said.

The six states filed suit in September. Lawyers for the administration countered that the Department of Education has “broad authority to administer federal student financial aid programs.” A court filing said the Higher Education Student Aid Opportunity Act of 2003, or HEROES Act, allows the Secretary of Education to waive or vary the terms of wartime federal student loans. or national emergency.

“COVID-19 is such an emergency,” the filing reads.

The HEROES Act was enacted after the September 11, 2001 terrorist attacks to help the military. The Justice Department says the law allows Biden to reduce or forgive student loan debt in the event of a national emergency. Republicans argue the administration is misinterpreting the law, in part because the pandemic is no longer considered a national emergency.

Justice Department attorney Brian Netter told Autrey during the Oct. 12 hearing that the fallout from the COVID-19 pandemic was still being felt. He said defaults on student loans have skyrocketed over the past 2 1/2 years.

A federal judge on Thursday rejected an effort by six Republican-led states to block the plan, hours after Supreme Court Justice Amy Coney Barrett dismissed an appeal in another case brought by a Wisconsin taxpayer group .

Austin Landis and David Mendez of Spectrum News contributed to this report.


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