On Friday, President Biden’s student debt relief plan was temporarily blocked by a US Court of Appeals. If the bill goes through it will cost the federal government about $400 billion, according to the latest CBO reports.
The White House is confident and unfazed that this freeze is only temporary as the St. Louis-based court stopped “discharging any student loan debt” until the process was resolved. Appeal briefings will be heard as early as Monday to resolve the dispute as early as possible.
“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,” White House press secretary Karine Jean-Pierre said in a statement.
The White House claims they will be ready to pay applicants upon permission from the courts saying: “It also does not prevent us from reviewing these applications and preparing them for transmission to loan servicers.”
We will know by the end of next week whether this case will continue and the loan forgiveness will be frozen indefinitely, or the program can begin again.
This case came to the Federal Appeals court just days after the lawsuit by 6 states was dismissed. Missouri, Arkansas, Kansas, Nebraska, South Carolina, and Iowa all argued that Biden does not have the power to enact such a policy.
US District Judge Henry Edward Autrey who first dismissed the state’s lawsuit reasoned: “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.”
Justice Amy Coney Barrett, who is assigned to the Seventh Circuit Court of Appeals, heard a similar case just days ago from a taxpayer group from Wisconsin. Barrett, representing the Supreme Court, dismissed the case.
NPR referenced a Supreme court case as the reasoning for these cases being dismissed saying: “In 2007, the Supreme Court said, ‘if every federal taxpayer could sue to challenge any Government expenditure, the federal courts would cease to function as
courts of law and would be cast in the role of general complaint bureaus.’”
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