Biden administration will ask Supreme Court to allow student loan debt relief program to resume

- Advertisement -


  • The Biden administration said in a new court filing that it would ask the Supreme Court to lift an injunction and allow it to restart a major student loan debt relief program.
  • The filing came three days after a federal appeals court in St. Louis issued a nationwide injunction temporarily banning the program.
  • The ruling by an appeals court was the latest in a series of legal challenges to President Joe Biden’s plan to cancel up to $20,000 in student loans for millions of Americans.

- Advertisement -

The Biden administration said in a new court filing Thursday that it will ask the Supreme Court to lift an injunction and allow it to restart a major student loan debt relief program.

- Advertisement -

The filing came three days after the federal appeals court for the 8th Circuit in St. Louis issued a nationwide injunction temporarily banning the program.

The ruling by an appeals court, which will be the target of a planned request to the Supreme Court, was the latest in a series of legal challenges to President Joe Biden’s cancellation of up to $20,000 in student loans for millions of Americans.

- Advertisement -

The Biden administration stopped accepting applications for relief earlier this month after a federal district judge in Texas last week ruled its plan “unconstitutional.”

Court filings Thursday asked a federal appeals court for the 5th Circuit to block a Texas judge’s order pending an appeal of the decision by the Justice Department. The filing said the judge “lacked jurisdiction to enter an order.”

And the filing says, “The government will file an application with the Supreme Court to vacate a separate injunction [Education] The secretary’s action was entered in the Eighth Circuit earlier this week.”

Earlier Thursday, the Biden administration unveiled updated guidelines that would make it easier for people struggling with their student loans to discharge it in bankruptcy.

In a case for the 8th Circuit, another federal judge rejected a challenge to the debt relief program brought by six states—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina, ruling that while the states had “substantial and significant challenges to the debt relief scheme,” they ultimately lacked the legal standing to pursue the matter.

Standing refers to the consideration that a person or entity will be affected by the action they wish to challenge in court.

The GOP-led states appealed after their lawsuit was denied.

A three-judge panel on the 8th Circuit ruled Monday that Missouri has shown potential injury from the administration’s program, pointing out that a major loan servicer headquartered in the state, the Missouri Higher Education Loan Authority, or MOHELA, under Will lose revenue. Plan. The Missouri Department of State Treasury receives funds from Mohela.

The Biden administration has defended the legality of its plan and vowed to keep fighting the challenges.

Education Secretary Miguel Cardona said in a statement, “We strongly believe that the Biden-Harris student loan relief plan is valid and necessary to allow borrowers and working families breathing space to recover from the pandemic and ensure that May be done that they are successful when the repayments are resumed.”

“Amidst attempts to block our debt relief program, we are not standing by.”

A top US Department of Education official recently warned of a historic spike in student loan defaults if its forgiveness plan is not completed.

“These student loan borrowers had a reasonable expectation and belief that they would not have to make additional payments on their federal student loans,” James Quayle, undersecretary of the US Department of Education, wrote in a court filing.

“This belief may prevent them from making payments, even if the Department is barred from effecting debt relief,” he wrote.

“Unless the Department is allowed to provide one-time student loan debt relief,” he continues, “we expect higher loan default rates due to ongoing confusion about the amount owed to this group of borrowers.” There will be rates.

Credit: www.cnbc.com /

- Advertisement -

Recent Articles

Related Stories