Massive Victory For Republicans: Federal Court Drops Bomb On Joe Biden’s Radical Proposed Student Debt Relief Plan

Associated Press

Disclaimer:  This article may contain the personal views and opinions of the author.

It might well be the case that the Democrats have been buoyed and emboldened by a better-than-expected performance at the mid terms. President Biden has certainly said as much. However, that momentum might be shunted as a federal appeals court handed President Joe Biden a massive loss and issued a nationwide injunction against the Biden administration’s student loan debt relief program.

The ruling by 8th Circuit Court of Appeals in St. Louis came after Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina argued in a lawsuit that the loan relief program threatens their future tax revenues and the plan circumvents congressional authority.

In fact, it has just been reported by CNBC that:

A federal appeals court Monday issued a nationwide injunction temporarily barring the Biden administration’s student loan debt relief program.

The ruling by the 8th Circuit Court of Appeals in St. Louis is the latest in a series of legal challenges to President Joe Biden’s plan to cancel up to $20,000 in student debt for millions of Americans. The Biden administration stopped accepting applications for its relief on Friday after a federal district judge in Texas struck down its plan Thursday evening, calling it “unconstitutional.”

Monday’s decision by the appeals court came after six GOP-led states argued in a lawsuit that the loan relief program threatens their future tax revenues and that the plan circumvents congressional authority.

“The injunction will remain in effect until further order of this court or the Supreme Court of the United States,” a three-judge panel of the appeals court said in its ruling.

CNBC went on to report that:

The injunction will put the program on hold pending an appeal of a lower court ruling that had allowed the debt relief program to go forward. The Biden administration could ask the Supreme Court to lift the injunction.

“We are confident in our legal authority for the student debt relief program and believe it is necessary to help borrowers most in need as they recover from the pandemic,” White House Press Secretary Karine Jean-Pierre said. “The Administration will continue to fight these baseless lawsuits by Republican officials and special interests and will never stop fighting to support working and middle class Americans.”

A federal judge originally rejected the challenge brought by the six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — saying that while they raised “important and significant challenges to the debt relief plan,” they ultimately lacked legal standing to pursue the case.

It was further reported by Tennessee Lookout that:

A federal judge in Missouri originally rejected the six-state lawsuit, ruling that those states lacked legal standing to pursue a case on the grounds that they will be harmed in the future. 

However, the appeals court found that in Missouri, that state had shown likely injury, as a major loan servicer — Missouri Higher Education Loan Authority, known as MOHELA — that is based in the state would lose revenue because of the debt relief program. 

“Due to MOHELA’s financial obligations to the State treasury, the challenged student loan debt cancellation presents a threatened financial harm to the State of Missouri,” according to the panel. “Missouri, therefore, likely has legal standing to bring its claim. And since at least one party likely has standing, we need not address the standing of the other States.”

Tennesee Lookout went on to report that:

The three-judge panel decided against restricting the injunction to those six states because it would “be impractical and would fail to provide complete relief,” and because MOHELA has loans nationwide.

“Given MOHELA’s national role in servicing accounts, we discern no workable path in this emergency posture for narrowing the scope of relief,” according to the order. 

​​More than 43 million Americans have student loan debt, and the Federal Reserve estimates that the total U.S. student loan debt is more than $1.76 trillion.

The Biden administration’s plan would forgive up to $10,000 in loan forgiveness for eligible student loan borrowers, while the recipients of Pell Grants could apply for up to $20,000 in debt relief. The program is intended to assist borrowers who, in 2021, earned no more than $125,000 per year, and couples who earned up to $250,000 per year.

President Joe Biden and the student debt question has been a topic of discussion for some time. In fact, The Raging Patriot reported back in September that As expected, President Joe Biden’s decision to cancel $10,000 of federal student loan debt has been met with criticism from Republicans. Missouri Sen. Josh Hawley announced he will introduce legislation that would make colleges and universities responsible for the student debt instead of canceling it. “This is a reckless and irresponsible policy that will force American taxpayers to bail out wealthy and well-connected institutions,” Hawley said in a statement.

“My bill will make colleges and universities pay for the student debt they have created, instead of shifting the cost onto American taxpayers.” Hawley’s bill would require colleges and universities to reimburse the federal government for any student loan debt that is forgiven. This would effectively make colleges and universities responsible for the student debt they have created, instead of canceling it and forcing American taxpayers to bail out these institutions. The bill, titled the “Make the Universities Pay Act,” would require institutions of higher education participating in the Federal Direct Student Loan Program to pay 50% of any student loan balance that is in default.