Biden’s Plan to Forgive Student Loan Has Been Blocked by a U.S Court for an Additional Year

Plan to Forgive Student Loan Has Been Blocked: Speaking at the Central New Mexico Community College (CNM) Student Resource Center in Albuquerque, New Mexico, U.S., on November 3, 2022, Vice President Joe Biden discussed “student debt reduction” in his campaign speech.

Rejection of Student Loan Forgiveness Plan, an Overview

According to a document that was filed in court on Monday, a United States appeals court has prolonged a stay on President Joe Biden’s intention to cancel hundreds of billions of dollars worth of student loans. In August, the 8th United States Circuit Court of Appeals, which has its headquarters in St. Louis, granted an injunction that prevents the United States Department of Education from eliminating student loan debt based on Vice President Biden’s executive order.

The decision was reached in the course of a legal battle that involved the states of Nebraska, Missouri, Arkansas, Iowa, and Kansas, as well as South Carolina. The six states contend that Vice President Biden circumvented the power of Congress and that the plan endangers future tax revenues as well as the money collected by state organizations that invest in or service student loans.

On October 21, the court put a temporary hold on the ability of the Biden administration to discharge student debts while it evaluated an emergency request for an injunction that was submitted by six different states. The state’s legal challenge was rejected, but they have indicated that they would appeal the ruling.

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Plan to Forgive Student Loan Has Been Blocked
White House spokeswoman Karine Jean-Pierre issued a written statement on Monday saying that they are “confident in our legal authority for the student debt relief program” and that they “think it is vital to support borrowers most in need while they recover from the pandemic.”

According to Jean-Pierre, “The Administration will never stop fighting to protect working and middle-class Americans” and “will continue to battle these frivolous lawsuits by Republican politicians and special groups.”

The impartial Congressional Budget Office estimates that Vice President Biden’s proposal would wipe off around 430 billion dollars of the already outstanding 1.6 trillion dollars in student debt.

Borrowers who have an annual income of less than $125,000, or $250,000 for married couples, are eligible to have up to $10,000 of their outstanding student loan debt forgiven through this program. Students from low-income families who attended college and got Pell Grants may be eligible to have up to $20,000 of their student loans forgiven.

Biden had pledged to assist borrowers who had graduated from college but were still struggling to pay off their student loans during his candidacy for the presidency in 2020. The Democrats had thought that the strategy would increase support for them going into the midterm elections that took place last week.

Although the plan has been contested in court by a number of conservative state attorneys general and legal groups, the plaintiffs have had a difficult time proving that they were actually damaged by the plan in a way that gives them the legal right to sue over it.

Following a lawsuit that was filed on November 10 by two borrowers who were either partially or entirely ineligible for the debt forgiveness, a federal court in Texas decided that the scheme was improper and declared it to be unlawful. The Department of Justice initiated the process to appeal the verdict.

The White House has indicated that it will maintain its commitment to the strategy. However, in light of the ongoing legal issues, the federal government decided to cease accepting new applications one week ago.

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