There's a kind of depravity that underlies everything the GOP does now. It seems like they object to it, and try to obstruct everything the Dems try to do - everything most of us think they should be doing.
I can see the point about expecting everyone to honor their word and pay their debts, but it rings exceedingly hollow when Republicans bitch about a few billion in student loan forgiveness while threatening to blow up the world if anyone suggests their TaxScam2017™ may have been a bit much, and maybe we should rethink that one.
Anyway, they challenged Biden - again - and they lost - again.
Six GOP-led states said the Biden administration overstepped its authority in its plan to forgive up to $20,000 in federal student-loan debt
A federal judge on Thursday denied a bid by six Republican-led states to block the Biden administration from moving forward with plans to cancel up to $20,000 in federal student-loan debt for more than 40 million people, days after borrowers began signing up for relief.
The states filed a lawsuit last month, saying that the administration has overstepped its authority by creating the forgiveness program without going through Congress. They also claimed the plan would threaten the revenue of state entities that profit from federal student loan, and they requested the court stop the federal government from canceling any debt as the case proceeds.
U.S. District Judge Henry E. Autrey of the Eastern District of Missouri issued a 19-page order concluding that the states lacked the standing to bring the lawsuit to stop one of the administration’s signature economic policies. “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,” he wrote.
The ruling by Autrey, a George W. Bush appointee, was one of two victories Thursday for the administration’s plan. In a separate case, U.S. Supreme Court Justice Amy Coney Barrett denied a request by the conservative legal outfit Wisconsin Institute for Law and Liberty, working on behalf of a taxpayer’s association, to pause the program.
Nebraska Attorney General Doug Peterson (R), one of the states’ officials who sued the administration, said the coalition would appeal. “The states continue to believe that they do in fact have standing to raise their important legal challenges,” he said in a statement. “As a result, the States will be appealing and seeking immediate relief.” The other states involved in the suit are Arkansas, Iowa, Kansas, Missouri and South Carolina.
An appeal would send the case to a conservative panel of judges on the U.S. Court of Appeals for the 8th Circuit.
The lawsuit, one of several filed against the forgiveness plan, was widely considered to be one of the most serious legal challenges.
Who is eligible for student loan forgiveness?
- President Biden’s new plan will cancel some of the federal student debt held by millions of Americans.
- Borrowers can qualify for up to $10,000 in student loan forgiveness, and recipients of Pell Grants are eligible for an additional $10,000 in forgiveness.
- Want to calculate your eligibility? See how much of your loan debt can be forgiven.
The Education Department began accepting applications for relief last Friday. More than 12 million people have applied to date, according to the White House, while 8 million more have been notified of their eligibility for automatic cancellation because their information is already on file. The administration said people should complete the form by Nov. 15 to have them processed before federal student loan payments resume in January.
“The court made the right call in dismissing this ideological challenge to debt relief,” said Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project. “The six states failed to establish that student debt relief harms them — in fact, it promises over $46 billion in relief to working- and middle-class residents in their states. Their residents should cheer this decision along with families across the country.”
Biden’s loan relief plan will cancel up to $10,000 in federal student debt for borrowers who earn up to $125,000 annually, or up to $250,000 for married couples. Borrowers who received Pell Grants are eligible for an additional $10,000 in forgiveness.
The Biden administration has been adamant that its debt cancellation plan is legal. The Justice Department released a 25-page memo in August justifying the policy under a 2003 law authorizing the secretary of education “to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.”
It is the same law, known as the Heroes Act, the Trump administration used at the outset of the coronavirus pandemic to pause payments on federal student loans as Americans faced the economic fallout of the national health crisis. Justice Department attorney Brian Netter recently reminded the court of that and noted there were no attempts to challenge the legality of the payment moratorium.
“This is a statute about emergencies,” Netter said during a recent court hearing on the injunction. “It seems hard to fathom that Congress wouldn’t have understood at the time that a larger national emergency is going to prompt and necessitate a larger action by the secretary of education.”
Judge Autrey at the hearing questioned whether the scale of loan cancellation, at a cost of roughly $300 billion, warranted explicit authorization from Congress because of the economic and political significance, a legal idea known as the “major questions” doctrine. The Supreme Court invoked that doctrine earlier this year to limit the Environmental Protection Agency’s power to combat climate change. Higher education experts had expected the doctrine to be used to invalidate Biden’s debt relief program.
Netter said the debt relief program was designed to respond to the scale of the national emergency and avoid an anticipated wave of delinquencies when the pause on federal student-loan payments lifts. The pause was extended through Dec. 31.
“The way that this Supreme Court has analyzed agency action could pose a threat [to the administration] if this case got that far,” said Kate Elengold, assistant professor of law at the University of North Carolina School of Law. “I think the department has a really strong argument, but that’s what I’m watching most closely.”
The coalition of states involved in the lawsuit argue that the administration has no right to take action on this scale without congressional approval. Moreover, they say, the policy would impose economic harm on state investment entities and student loan companies that own debt from the defunct Federal Family Education Loan (FFEL) program.
After Biden unveiled his cancellation plan in August, many commercial FFEL borrowers consolidated their loans into Direct Loans to qualify for relief. The states have said the plan enticed borrowers to consolidate, which deprives their related entities of interest income.
But hours before the case was filed, the Biden administration scaled back eligibility for the debt relief program, saying commercial FFEL borrowers could no longer consolidate to qualify for the one-time relief. Justice Department attorneys said the decision undercut the states’ claims.
Judge Autrey agreed. In Thursday’s ruling, he said, “the lack of the ongoing incentive to consolidate defeats the claims of Arkansas and Nebraska.”
He also questioned whether Missouri had the right to bring a lawsuit on behalf of the Missouri Higher Education Loan Authority, a quasi-state outfit that owns and services FFEL debt. Autrey said that while the governor does appoint five members of the company’s board, its revenue and liabilities are independent of the state.
Most of the states involved in the lawsuit say they will lose tax revenue because of Biden’s policy. They take their cue from the federal government, which will not count discharged student debt as taxable income through January 2026. Autrey shot down that claim, saying “the tenuous nature of future income tax revenue is insufficient to establish a cognizable injury to support standing to bring this action.”
The six states’ lawsuit is one of several legal challenges aiming to block Biden’s debt relief program.
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