Topline
Federal student loan forgiveness will continue rolling out this month as planned, as a federal judge rejected Thursday an attempt by Republican-led states to block the policy because they believed the Biden administration exceeded its authority by imposing it.
President Joe Biden delivers remarks regarding student loan debt forgiveness with Education … [+]
Key Facts
U.S. District Judge Henry Edward Autrey ruled in favor of the Biden Administration and dismissed the states’ request for an injunction that would block the law, finding they did not have standing to bring the case.
Six states—Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina—sued the Biden administration and asked Autrey to block the policy from taking effect, arguing the White House overstepped its authority with the debt forgiveness plan and that it would harm states economically by lessening their tax revenue and affecting state programs that service federal loans.
The Biden administration justified the debt forgiveness under the HEROES Act, which grants the federal government authority to “waive or modify” student financial assistance programs in response to national emergencies, but the states argued the student loan plan goes beyond what that legislation allows.
The ruling means the Biden administration can continue with the student loan forgiveness program and start issuing relief to borrowers, after the application for debt relief first went live on Friday.
Autrey’s ruling came soon after the Supreme Court also rejected a separate lawsuit Thursday that similarly challenged the student loan forgiveness plan.
Chief Critic
“The federal government is engaged in a so far hidden, ever-changing … escapade of lawlessness,” James Campbell, an attorney 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.” The states have already appealed Autrey’s order.
What To Watch For
Federal student loan borrowers can now apply for loan forgiveness online, and the court’s ruling means those applications will stay open and nothing about the program will change. It’s still unclear when those applications will start being processed and borrowers will have their debt relieved, though the administration told Autrey it did not plan to discharge any debt relief before October 23. The application went live via a beta test on Friday before officially launching on Monday, but all applications during the beta period are being processed and borrowers will not have to resubmit any information. All borrowers must submit an application for loan forgiveness by December 31, 2023.
Key Background
The White House announced in August it would forgive student loans for many borrowers, relieving $10,000 in debt for people earning less than $125,000 ($250,000 for a household), or $20,000 in debt for federal Pell Grant recipients. Though the move has been cheered by Democrats, Republicans have heavily decried it, and the lawsuit brought by the six GOP states is one of several that have already been filed challenging the move. A separate lawsuit brought by Arizona Attorney General Mark Brnovich is still pending, while courts have already thrown out other challenges brought by the conservative groups Wisconsin Institute for Law and Liberty and the Pacific Legal Foundation, which were both 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 take down the student loan policy, and legal experts cited by the Post have suggested the states’ lawsuit is likely the best equipped legally to successfully challenge the policy. The Biden administration also walked back a part of its forgiveness plan involving federal loans held by private companies on the same day the GOP states’ lawsuit was filed, after that complaint heavily took issues with those loans specifically.
Further Reading
Judge to hear GOP states’ suit to block Biden student debt relief plan (Washington Post)
Biden Student Loan Relief Plan Challenges Again: Here’s How It Could Be Blocked (Forbes)
Source: https://www.forbes.com/sites/alisondurkee/2022/10/20/bidens-student-loan-forgiveness-gets-greenlight-as-judge-rules-against-gop-challenge/