U.S. District Judge Henry E. Autry for the Eastern District of Missouri issued a 19-page order that concluded the state was not qualified to sue to suspend one of the state’s signature economic policies. issued. “While plaintiffs present significant and significant challenges to the debt relief plan, plaintiffs as of now cannot proceed to resolve these challenges,” he wrote.
The ruling by George W. Bush’s appointee Autry was one of two victories over the administration’s plans on Thursday. In another case, U.S. Supreme Court Justice Amy Coney Barrett rejected a request by the Wisconsin Institute for Law and Freedom, a conservative law firm acting on behalf of the Taxpayers Association, to suspend the program. Did.
Nebraska Attorney General Doug Peterson, a Republican, was one of the state officials who sued the administration, and said the coalition would appeal. “The state continues to believe it is entitled to a material legal challenge,” he said in a statement. “As a result, the state will appeal and seek immediate relief.” Other states involved in the lawsuit are Arkansas, Iowa, Kansas, Missouri and South Carolina.
The appeal will be forwarded to a conservative panel of judges in the Eighth Circuit Court of Appeals.
The lawsuit was one of several lawsuits filed against the Forgiveness Plan and was widely considered to be one of the most serious legal challenges.
“Republican congressmen and GOP governors are doing everything they can to deny student debt forgiveness even to their own voters,” White House Press Secretary Carine Jean-Pierre said in a statement Thursday. . “The president will not stop fighting these suits and will work to help families recover from the pandemic.”
The Department of Education began accepting applications for relief last Friday. Over 12 million According to the White House, 8 million people have applied so far and another 8 million have been notified that they are eligible for automatic cancellation. Because their information is already on file. The administration said forms must be completed by Nov. 15 to ensure that federal student loan payments are processed before payments resume in January.
“The court did the right thing to dismiss this ideological challenge to debt relief,” said Abby Shaffros, director of the Student Loan Borrower Assistance Project at the National Center for Consumer Law. “Six states failed to demonstrate that student debt relief will harm them. Their residents, along with families across the country, should support this decision.”
Biden’s Loan Relief Plan will cancel up to $10,000 in federal student loans for borrowers up to $125,000 a year, or up to $250,000 for married couples. I am eligible for an exemption.
The Biden administration is adamant that the debt forgiveness plan is legal. The Justice Department released his 25-page memo in August 2003, authorizing the Secretary of Education to “reduce the hardships that recipients of federal student loans may suffer as a result of the national emergency.” Justified this policy under the law of the year.
This is the same law the Trump administration used early in the coronavirus, known as the Heroes Act. The pandemic suspended federal student loan payments as Americans faced the economic fallout of the national health crisis. Justice Department attorney Brian Netter recently reminded the court of that, saying there had been no attempt to challenge the legality of the payment moratorium.
“This is the emergency law,” Netter said at a recent court hearing injunction hearing. “It seems hard to understand that Congress did not understand at the time that a greater national emergency prompted and required greater action by the Secretary of Education.”
At the hearing, Judge Autry questioned whether the size of the loan cancellations, costing about $300 billion, justified explicit approval from Congress because of their economic and political importance. I saw Earlier this year, the Supreme Court used that doctrine to limit the Environmental Protection Agency’s powers to fight climate change. Higher education experts expected this doctrine to be used to void Biden’s debt relief program.
Netter said the debt relief program was designed to meet the scale of the national emergency and avoid the expected wave of delinquencies when the moratorium on federal student loan payments is lifted. The suspension has been extended until December 31st.
“The way this Supreme Court analyzed the actions of government agencies could pose a threat [to the administration] If this case progresses that far,” said Kate Ellengold, an associate professor at the University of North Carolina School of Law. “I think the department has a very strong argument, but that’s what I’m watching most closely.”
Union of states involved in litigation It argues that the administration has no right to act on this scale without congressional approval. and student loan companies, they say.
After Biden announced his exit plans in August, many commercial FFEL borrowers consolidated their loans into direct loans to qualify for relief. The state said the plan would encourage borrowers to consolidate and deprive related entities of interest income.
However, hours before the lawsuit was filed, the Biden administration said it had curtailed eligibility for the debt relief program and that commercial FFEL borrowers could no longer consolidate to qualify for the one-time relief. Attorneys for the Justice Department said the decision weakened the state’s case.
Justice Autry agreed. In Thursday’s ruling, he said, “The continued lack of incentives to consolidate defeats Arkansas and Nebraska’s claims.”
He also questioned whether Missouri has the right to sue on behalf of the Missouri Higher Education Loan Authority (Missouri Higher Education Loan Authority). Autrey said the governor appoints his five members to the company’s board of directors, whose revenues and liabilities are independent of the state.
Most of the states involved in the lawsuit say tax revenue will be lost due to Biden’s policies. They cue that the federal government won’t count his discharged student loans as taxable income until January 2026. bring this action.
The six-state lawsuit is one of several legal challenges aimed at blocking Biden’s debt relief program.
Among other lawsuits underway are a lawsuit filed by the conservative Job Creators Network Foundation on behalf of ineligible commercial FFEL borrowers and borrowers who are ineligible for the full amount of $20,000 in debt relief. There is a thing The complaint alleges that the government did not provide a comment period and did not give borrowers an opportunity to comment on the policy. A judicial attorney has argued in other lawsuits that raise similar claims that the Heroes Act does not require notice and comment, said Ellen Gold of the UNC School of Law. A hearing on the group’s injunction is scheduled for Tuesday.
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