News report

Biden’s student loan forgiveness gets green light as judge rules against GOP challenge

Topline

Federal student loan forgiveness will continue to roll out this month as planned, says federal judge rejected Thursday saw an attempt by Republican-led states to block the policy because they believed the Biden administration had overstepped its authority in imposing it.

Highlights

U.S. District Judge Henry Edward Autrey ruled in favor of the Biden administration and rejected the states’ request for an injunction that would block the law, finding they lacked standing to bring the case.

Six states—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—for follow-up the Biden administration and asked Autrey to prevent the policy from taking effect, arguing that the White House had overstepped its authority with the debt cancellation plan and that it would hurt states economically by reducing their revenue taxes and affecting state programs that administer federal loans.

The Biden administration justified the debt cancellation under the HEROES Act, which grants the federal government the power to “waive or modify” student financial aid programs in response to national emergencies, but states have argues that the student loan scheme went beyond what this legislation allows.

The decision means the Biden administration can continue with the student loan forgiveness program and begin providing relief to borrowers, after the debt relief request was first sought. went live Friday.

Autrey’s decision came shortly after the Supreme Court also ruled rejected a separate lawsuit on Thursday that also challenged the student loan forgiveness plan.

Chief Spokesperson

“The federal government is engaged in a hitherto hidden and ever-evolving escapade of anarchy,” James Campbell, a lawyer with the Nebraska attorney general’s office who argued on behalf of the plaintiffs, said during a hearing in the case, accusing the Biden administration of “making this up as they go, acting without agency authority, and flouting the HEROES Act.” States have already appealed Order of Autrey.

To monitor

Federal Student Loan Borrowers can now apply for online loan forgiveness, and the court’s decision means that these applications will remain open and nothing in the program will change. It remains unclear when those applications will begin to be processed and borrowers will be relieved of their debt, although the administration told Autrey that it does not expect to cancel debt relief until October 23. The app went live via a beta test on Friday before officially launch Monday, but all applications during the beta period are being processed and borrowers won’t have to resubmit information. All borrowers must submit a request for loan forgiveness by December 31, 2023.

Key Context

The White House announcement in August, it would forgive student loans for many borrowers, relieving $10,000 of debt for people earning less than $125,000 ($250,000 for a household) or $20,000 of debt for federal Pell Grant recipients. Although the decision was applauded by Democrats, Republicans strongly decried it, and the lawsuit filed by the six GOP states is one of many that have already been filed challenging the decision. A separate court case filed by Arizona Attorney General Mark Brnovich is still pending, while courts have already dismissed other challenges brought by the conservative groups Wisconsin Institute for Law and Liberty and the Pacific Legal Foundation, both of which were dismissed for lack of standing. The Washington Post reported before the GOP states lawsuit was filed that Republican attorneys general were strategizing on a national litigation plan that could scrap the student loan policy, and legal experts cited by the Job suggested that the states trial is probably best equipped legally to successfully challenge the policy. The Biden administration has also came back part of his remission plan involving federal loans held by private companies on the same day the GOP states lawsuit was filed, after that lawsuit raised numerous issues with those loans in particular.

Further reading

Judge to hear GOP states’ complaint to block Biden’s student debt relief plan (Washington Post)

The challenges of the Biden student loan relief plan again: Here’s how it could be stalled (Forbes)

Biden Backtracks On Student Loan Forgiveness – Some Borrowers With Private Federal Loans No Longer Eligible (Forbes)