Federal appeals court STOPS Biden’s student loan forgiveness program

A federal appeals court has blocked the Biden administration’s plan to forgive hundreds of billions of dollars in federal student loan debt, Arkansas A federal court said it needed more time to rule on an emergency request by Republican-led states to block the policy.

The Biden administration previously said in court filings that it could begin canceling student loans as early as this Sunday.

The case in Arkansas’ court, the 8th Circuit Court of Appeals, is one of a number of challenges that conservative state attorneys general and legal groups have filed to halt the debt-forgiveness plan.

The plan, announced in August, was designed for people who took out loans to pay for college.

States that contested included Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina.

On Thursday, another court — in Missouri — rejected a Republican-led challenge to Biden’s plan, shortly after U.S. Supreme Court Justice Amy Coney Barrett rejected a request in another case to block it.

U.S. District Judge Henry Autry in St. Louis said that while the six Republican-led states had raised “important and significant challenges to the debt relief plan,” they lacked the necessary legal standing to proceed.

U.S. District Judge Henry Autry of St. Louis, Mo., and U.S. Supreme Court Justice Amy Coney Barrett rejected challenges to Biden’s student debt forgiveness program

Advocates for student loan forgiveness attend a news conference on Pennsylvania Avenue in front of the White House in Washington, DC, U.S., on August 25, 2022.

Supreme Court Justice Amy Coney Barrett rejected an emergency bid by a group of taxpayers to end President Biden’s student loan repayment plan, which began Sunday

In its challenge, the GOP argued that the massive debt cancellation was an overreaching and unconstitutional executive act that was never approved by Congress.

States have said the program would reduce their tax revenues and hurt the profits of government entities that service student loans. This part of the argument was included to justify their legal position, according to Wall Street Journal.

Judge Autry dismissed the appeal in the case, saying the claim of loss of tax revenue was “purely speculative”.

Autry’s ruling came an hour after Barrett denied, without explanation, an emergency request to suspend a debt relief plan related to the Brown County Taxpayers Association.

In a filing for the emergency ban, the association argued that the Biden administration’s move is unconstitutional, exceeds its executive authority and targets American taxpayers.

A lower court dismissed the group’s lawsuit for lack of legal standing because it could not show that it was personally harmed by the loan waiver.

Barrett, appointed by the Supreme Court to handle emergency cases arising in a group of states including Wisconsin, did not seek a response from the Biden administration to the group’s request.

Presumably, Barrett denied the application because the Brown County Taxpayers Association failed to prove that they suffered the direct harm necessary to have a cause of action.

In the past, the courts have already recognized that a group of taxpayers does not have the right to file a subpoena. None of the judges who heard the case ruled on whether Biden acted legally in canceling the debt.

The plaintiffs in the case are represented by the Wisconsin Institute for Law and Freedom, a conservative legal group.

Demonstrators for student debt cancellation outside the White House in August

In a policy that benefits millions of Americans, Biden announced that the US government will forgive up to $10,000 in student loan debt for borrowers earning less than $125,000 a year, or $250,000 for married couples.

Students who received Pell Grants to benefit low-income college students will have up to $20,000 in debt canceled.

The policy fulfilled a promise Biden made during the 2020 presidential campaign to help debt-ridden former college students. The US Congressional Budget Office estimated in September that debt relief would cost the government $400 billion.

Democrats hope the policy will boost their support in the Nov. 8 midterm elections, in which control of Congress is at stake, even as many Republicans criticize the plan.

The top Republican in the Senate, Mitch McConnell, called debt forgiveness “socialism” that would worsen inflation, reward “ultra-left activists” and give a “slap in the face” to Americans who paid back their student loans or chose careers, including military service, to avoid debt. .

The lawsuit is one of several legal challenges challenging Biden’s authority to cancel the debt under a 2003 law called the Higher Education Assistance Opportunity Act, which allows the government to modify or waive federal student loans during times of war or emergency.

The Biden administration claims that the COVID-19 pandemic was such an emergency.

Undaunted, the Wisconsin plaintiffs went to the Supreme Court after swift losses in lower courts. The group filed the lawsuit Oct. 4, alleging the policy “obligates federal taxes and wipes out federal assets [in the form of debt] without any authority.”

U.S. District Judge William Griesbach in Green Bay dismissed the case two days later, noting that simply paying taxes was not enough to challenge federal action. The 7th U.S. Circuit Court of Appeals in Chicago subsequently denied the group’s request to block the debt relief program pending an appeal.

Despite the outpouring of enthusiasm from students across the country, many — including members of his own party — criticized Biden’s plan as “out of step” with what Americans want.

The Committee for a Responsible Federal Budget released estimates in August saying the amnesty plan could cost taxpayers between $400 billion and $600 billion over the next decade.

That estimate includes the most recent information disclosed by the administration and is higher than previous estimates made before Biden announced that Pell Grant borrowers would receive $20,000 in forgiveness and those who would not receive a Pell Grant would remain at $10,000.

Thousands of families who have been saving for college are furious that their responsible financial planning will leave them with a dime out of the aid plan and potentially paying roughly $2,000 in taxes to help pay for it.

After a backlash, the Department for Education announced in September that private loans would not be covered by the aid plan.

The policy waiver is likely to affect 770,000 people, according to a CNN official.