8th Circuit court pauses loan forgiveness program

by mcardinal

Willie R. Tubbs, FISM News

 

A day after Supreme Court Justice Amy Coney Barrett denied a Wisconsin tax group’s request for an emergency stay on President Joe Biden’s student-debt-forgiveness program, the 8th Circuit Court of Appeals granted a similar request from a coalition of Republican-led states. 

Friday, the appellate court temporarily prevented the Biden administration from forgiving any loans while the federal court system processes a case brought by the states of Missouri, Arkansas, Kansas, Nebraska, and South Carolina, as well as legal representatives from Iowa.

“Big win alert! The 8th Circuit has stopped President Biden’s illegal student loan cancellation,” Arkansas Attorney General Leslie Rutledge tweeted Friday night. “Hardworking Americans who did not take on this debt should not be forced to shoulder this burden.”

Rutledge’s celebratory message might be a tad overstated in terms of what was accomplished, how long the effects could last, and what the decision will ultimately mean for the larger case. 

A lower-court judge had thrown out the lawsuit earlier this week, ruling the states had no standing to bring such a lawsuit against the federal government, and the appellate court did not weigh in on that question in its ruling. 

However, the 8th Circuit appellate court did halt the student-loan forgiveness program until Tuesday as the states seek to extend the pause while they appeal the lower court’s ruling. 

Importantly, the only portion of the program that is paused is the actual disbursement of money. Would-be forgiveness recipients can still apply for relief online, and the federal government can still process those applications. 

The federal government has until Monday to respond to the appellate court’s ruling, and the states will then have an additional day to respond to the federal government’s arguments before the court determines if a longer pause is appropriate. 

It is likely the Biden administration will offer a spirited fight. While the administration certainly has its legal rationale for pressing the issue, the president and Democrats also know they can ill-afford a lengthy injunction from a political standpoint.

White House Press Secretary Karine Jean-Pierre has stressed the fact that, despite being prevented from doling out actual forgiveness, which could have begun Sunday, the program is still up and running. 

“Tonight’s temporary order does not prevent borrowers from applying for student debt relief at studentaid.gov – and we encourage eligible borrowers to join the nearly 22 million Americans whose information the Department of Education already has,” Jean-Pierre said in a statement. “It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers.”

Jean-Pierre later added, “We will continue to move full speed ahead in our preparations in compliance with this order. And, the Administration will continue to fight Republican officials suing to block our efforts to provide relief to working families.”

Even if a lengthier pause is eventually granted, there is no guarantee this case or any other will end the program. 

Early returns for anti-forgiveness suits have been decidedly in favor of the Biden administration. The six Republican-led states and a Wisconsin taxpayer group have been ruled to lack standing, a legal term meaning that neither group can prove it is directly harmed by the loan-forgiveness program. 

This does not mean the Biden side will necessarily prevail. In throwing out cases for lack of standing, the lower courts have not yet officially offered an opinion on the legality of the program. 

Assuming conservatives can find someone, somewhere, who a court will agree is directly affected – which logically must occur as it would seem impossible that a many-billion-dollar program would directly impact no one in the country – a more robust court case will result. 

While there are numerous anti-loan-forgiveness suits in the court system at present, all make the same general claim. 

Conservative plaintiffs, broadly, argue the Biden administration lacks the legal remit to unilaterally cancel debt. Naturally, the administration disagrees and argues that the 2003 HEROES Act afforded the Secretary of Education such authority. 

This is a novel legal question, and one that a court is likely to take up. Once that happens, the case will almost certainly track its way to the Supreme Court. 

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