U.S. Appeals Court Blocks Biden’s $500 Million Student Loan Forgiveness Plan
The Eighth Circuit Court of Appeals blocked former President Joe Biden’s $500 million student loan forgiveness plan.
The three-judge panel agreed with Missouri and the other states that joined the lawsuit (Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma) that Biden and his Education Department overstepped their authority.
The judges also concluded that the plaintiffs satisfied the tests to receive the preliminary injunction:
- Threat of irreparable harm to the movant [party that makes a motion in a case]
- State of balance between this harm and the injury that granting the injunction will inflict on the other parties litigant
- Probability that the movant will succeed on the merits
- Public interest
The Education Department published the Saving on a Valuable Education (SAVE) plan after the Supreme Court struck down a previous student loan forgiveness plan.
SAVE reduced “the amount of income subject to loan payments, eliminated interest accrual, and expedited loan forgiveness for most borrowers.”
The plan also canceled some of the outstanding balances after the person paid towards the loans for 120 months.
The judges concluded (deleted citations):
We agree with the district court that at least one state, Missouri, has standing to sue due to financial harms to the Higher Education Loan Authority of the State of Missouri (MOHELA), and its standing is sufficient to resolve this appeal.As the Supreme Court previously held, Missouri suffers a cognizable financial harm when the Secretary enacts a plan that discharges student loans and closes accounts serviced by MOHELA. The SAVE Rule does so — it leads to loan forgiveness and closure of accounts serviced by MOHELA in as few as ten years of repayments. Once an account is closed, MOHELA loses future fees for servicing the accounts, which reduces its profits and ability to fund education in Missouri. Under the SAVE Rule, around 28,000 accounts held by MOHELA have already been closed, with 53,000 more identified as eligible for forgiveness. “This financial harm is an injury in fact directly traceable to the Secretary’s plan” and redressable through the relief sought by the states. Nevertheless, the federal officials assert Missouri lacks standing because the SAVE Rule provides some benefits to MOHELA and MOHELA has also requested some accounts it previously serviced be transferred to other loan servicers. We disagree.
The judges went further than the district court, which enjoined “the entire rule and the resurrected REPAYE [Revised Pay As You Earn] forgiveness.”
In other words, the judges blocked the administration from canceling more debt or allowing certain provisions to act independently.
The Education Department also cannot bring back any old repayment plans.
Biden and his cronies tried so hard to cancel student loan debts during his term. The courts kept shooting him down and yet…they kept trying.
This case should be the end of it. I say should because you know another Democratic administration will try to resurrect all of this.
I don’t want to subsidize anyone’s student loans. I chose Oklahoma State University because I could live at home, pay tuition out of pocket, and graduate debt-free.
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