Last week, a federal appeals court placed a temporary block on President Joe Biden’s student loan forgiveness program. Yet, according to U.S. Education Secretary Miguel Cardona, they plan to keep “moving full speed ahead” despite the hold.
The block comes as six Republican-led states argue the plan would cause a further economic downturn. The 8th Circuit Court of Appeals prohibited the Biden administration from “discharging any student loan debt” until the states’ emergency request has been ruled upon.
“We are pleased the temporary stay has been granted,” Nebraska Attorney General Doug Peterson said in a statement. “It’s very important that the legal issues involving presidential power be analyzed by the court before transferring over $400 billion in debt to American taxpayers.”
According to court records, debt relief was scheduled to begin on Sunday.
“According to Karina Jean-Pierre, the press secretary for the White House, the court order “does not reverse the trial court’s dismissal of the case, or suggest that the case has merit. It merely prevents debt from being discharged until the court makes a decision.”
“We continue to encourage working- and middle-class Americans to apply for debt relief,” said Cardona. “President Biden and this administration are committed to fighting for the millions of hardworking students and borrowers across the country.”
The temporary hold comes just hours after a federal judge in Missouri dismissed the six states’ case because “the Court lacks jurisdiction.”
On Thursday, President Biden’s student loan forgiveness program succeeded against two separate attempts to block the plan by one conservative group in Wisconsin and six Republican-led states.
These victories marked just the beginning of a war against a relief plan that will offer $20,000 of loan forgiveness to millions of college debt payers.
Supreme Court Justice Amy Coney Barrett, who was appointed by former president Donald Trump, promptly denied The Brown County Taxpayers Association’s emergency request to halt the policy. The group argued their right to challenge the program to save taxpayers the “staggering” blow they’ll face if the policy is approved.
In Missouri, a lawsuit brought forth by six Republican-led states was dismissed by U.S. District Judge Henry Edward Autrey, who was appointed by George W. Bush, arguing that the states lacked legal standing. “While Plaintiffs present important and significant challenges to the debt relief plan, the current Plaintiffs are unable to proceed to the resolution of these challenges,” Autrey wrote.
Six Republicans officials challenging the plan represented Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. They claim that the relief would pose economic despair as a result of lost tax revenue. Yet, Autrey argued their claims were “merely speculative.” That is the worry for nearly half of the nation’s governors, according to a joint letter signed by 22 U.S. governors to the Biden Administration in September.
“Americans who did not choose to take out student loans themselves should certainly not be forced to pay for the student loans of others,” they wrote. “At a time when inflation is sky high due to your unprecedented tax-and-spend agenda, your plan will encourage more student borrowing, incentivize higher tuition rates, and drive up inflation even further, negatively impacting every American.”
On Monday, Oct. 17, Biden officially opened applications for student debt forgiveness, which already received 8 million applications during its beta launch, the Associated Press reported. “It means more than 8 million Americans are—starting this week—on their way to receiving life-changing relief,” Biden said. “In total, more than 40 million Americans can stand to benefit from this relief, and about 90 percent of that relief is going to people making less than $75,000 a year.”
He made sure to address that “not a dime” of relief will go to those who are in the top five percent of the income bracket. “I will never apologize for helping working Americans and middle-class people as they recover from the pandemic, especially not the same Republicans who voted for a $2 trillion tax cut in the last administration.”