U.S. President Joe Biden speaks about student loan debt at the White House on August 24, 2022 in Washington, DC.
Alex Vuong | Getty
The Biden administration on Friday asked the Supreme Court to reinstate the federal student loan program after a federal appeals court issued a nationwide injunction against the plan.
The administration’s request, previewed in another court filing on Thursday, criticized the 8th U.S. Court of Appeals for blocking the debt forgiveness plan. That ban was issued earlier in response to a lawsuit by a group of Republican-controlled states.
“Eighth Circuit’s erroneous order left millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt, and unable to make financial decisions with a sound understanding. their future repayment obligations,” Attorney General Elizabeth Prelogar wrote in a filing to the Supreme Court on Friday. Court.
Prelogar also wrote that if the Supreme Court refuses to rescind the ban, it could treat the filing as a petition to the high court to hear the Biden administration’s appeal against the high court’s decision. below.
And if the Supreme Court accepts the administration’s appeal, if possible “put this case up for quick discussion and debate this Term,” she wrote. Holding on to President Joe Biden’s plan while the appeal goes on, Prelogar said, could leave borrowers uncertain about their debts until “around 2024.”
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Monday’s order by The eight-round panel of three judges in St. Louis is the latest in a series of legal challenges facing the President Joe Bidenplans to write off student debt of up to $20,000 for millions of Americans.
Biden administration stopped accepting relief applications at the beginning of the month after a federal district judge in Texas dismissed its plan last week, calling it “unconstitutional”.
In the 8th Circuit issue, another federal judge dismissed the challenge to the debt relief program brought by six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina.
The judge ruled that while the states presented “significant and significant challenges to the forgiveness plan,” they ultimately lacked the legal standing to pursue the case.
Stand refers to the idea that a person or organization will be affected by the action they seek to challenge in court.
The GOP-led states appealed after their cases were denied.
The board of appeals ruled Monday that Missouri had shown a possible loss from the administration’s program, pointing out that a major state-based lending company, the Federal Bureau of Investigation, Missouri higher education loan, or MOHELA, will lose its planned revenue. The Missouri Department of Treasury receives funds from MOHELA.
Borrower defaults could grow amid ‘ongoing confusion’
A top official at the US Department of Education recent warning that there could be a historic uptick in student defaults if its forgiveness plan is not allowed.
“These student loan borrowers have a reasonable expectation and belief that they will not have to pay more for their federal student loan,” wrote U.S. Under Secretary of Education James Kvaal in court filings. me”. “This trust can prevent them from making payments even if the Department is prevented from doing so,” he wrote.
“Unless the Department is allowed to offer a one-time loan relief to students,” he continued, “we expect this group of borrowers to have higher default rates due to continued confusion about what they owe. “
