President Joe Biden announced a student loan forgiveness plan during the election campaign in 2020. However, his administration started working on it recently in August. The plan is challenged by states.
Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina, and Wisconsin-based Brown County Taxpayers Association in the court as they claimed their revenue would directly get affected by the plan.
Biden Plan For Student Loan Forgiveness Survives Two Legal Challenges!
The plan is being challenged repeatedly, but it is winning because of a 2003 law called the Higher Education Relief Opportunities for Students Act. The law gives the secretary of education the authority to modify or waive any statutory or regulatory provision.
Concerning federal student aid during a war, military operation, or national emergency. And ex-President Donald Trump announced Covid-19 as a national emergency on March 13, 2020, which continued even during Biden’s presidency.
Biden Student Loan plan has been surviving the legal battle with multiple victories, but recently on Friday, it endured another two challenges. A coalition of Republican-led states brought a suit arguing that the student loan forgiveness plan would deprive states.
State-affiliated FFELP participants such as MOHELA, of revenue. However, the suit was dismissed by the federal judge, U.S. District Judge Henry Autrey in St. Louis, Missouri. She said that this suit was a significant challenge to the debt relief pain.
It lacked the necessary legal standing to be able to pursue the case. The states are petitioning for the ruling. Another suit that was brought in the court was by a conservative legal organization reasoning that the policy should be blocked because of potential state tax implications.
The argument was dismissed by the federal judge of Indiana. However, the Plaintiffs are still appealing. Approximately 43 million people hold $1.6 trillion in federal student loans, and the plan would cancel up to $20,000 in student loan debt of about 20 million borrowers.
About 20 million debtors are eligible and may see their debt erased. To be eligible, borrowers must have earned less than $125,000 annually, or households that make less than $250,000 a year are qualified for debt cancellation.
Pell Grants receivers are eligible for an additional $10,000. Students must be government-held federally to get qualified for the debt cancellation policy. On Friday, US President Joe Biden claimed 22 million people have applied for federal student loan relief in the week.’
Since the administration made the online application available. The White House says that more than half of the registered people are eligible for the program. It is still unclear how many will apply for debt cancellation.
To become eligible, people have to fill out a simple form that is available online. However, some may need to prove their income, while others can opt-out. In September, the Congressional Budget Office calculated and documented that the program.
It would cost the government about $400 billion. Democrats are hopeful that the plan will gain the support of the masses during the mid-term elections in November, in which control of Congress is at stake even as many republicans criticize the policy.
Mitch McConnell, the top Senate Republican, called the student loan forgiveness plan a socialist plan that will worsen inflation. He continued and said that it will be unfair to Americans who paid back their student loans.
Picked career paths including serving in the military to avoid taking on debt. However, Biden criticized Republicans who opposed the debt relief plan by calling their outrage hypocritical and wrong.
In addition, he said that he does not want to hear it from MAGA Republican officials who had millions of debt and pandemic relief loans forgiven, naming GOP lawmakers like Reps. Marjorie Taylor Greene and Vern Buchanan, who received loan forgiveness.
The result of the court decision is unclear for the 22 million borrowers who have applied for debt cancellation. The Biden administration was expected to begin erasing debt in mid-November but the future is uncertain.
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