ST. LOUIS (AP) — A federal judge in St. Louis on Thursday rejected an attempt by six Republican-led states to block the Biden administration’s plan to cancel student loan debt for tens of millions of Americans.
U.S. District Judge Henry Autrey wrote that because the six states — Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina — could not demonstrate standing, “the Court has no jurisdiction to hear this case.”
Suzanne Gage, spokeswoman for Nebraska Attorney General Doug Peterson, said the states are appealing. She said in a statement that the states “continue to believe that they do indeed have a right to address their important legal challenges.”
Democratic President Joe Biden announced in August that his administration would cancel up to $20,000 in education debt for large numbers of borrowers. The announcement immediately became a major political issue in the run-up to the midterm elections in November.
The lawsuit of the states is one of the few that have been submitted. Earlier Thursday, Supreme Court Justice Amy Comey Barrett dismissed an appeal from a Wisconsin taxpayer group to end the debt cancellation program.
Barrett, who oversees emergency calls from Wisconsin and neighboring states, did not comment on the Brown County Taxpayers Association’s rejection of the appeal. The group wrote in the Supreme Court’s file that it needed an emergency injunction because the administration could begin canceling outstanding student debt as early as Sunday.
In the lawsuit filed by the states, attorneys for the administration said the Department of Education has “broad powers to administer federal student financial aid programs.” A court filing stated that the 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act, allows the Secretary of Education to waive or change the terms of federal student loans in times of war or national emergencies.
“COVID-19 is such an emergency,” the filing said.
The Congressional Budget Office has said the program will cost about $400 billion over the next three decades. James Campbell, an attorney for the Nebraska Attorney General’s office, told Autrey in an Oct. 12 hearing that the government is acting outside its authorities in a way that will cost states millions of dollars.
The plan would cancel $10,000 in student loans for those earning less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically have more financial need, are forgiven an additional $10,000 in debt.
Conservative lawyers, Republican lawmakers and business-oriented groups have argued that Biden overstepped his authority by taking such sweeping measures without Congressional approval. They called it an unfair government giveaway for relatively wealthy people at the expense of taxpayers who were not pursuing higher education.
Chris Nuelle, spokesman for Missouri Attorney General Eric Schmitt, said the plan “will unfairly burden working-class families with even more economic hardship.”
Many Democratic lawmakers faced with tough reelection contests have distanced themselves from the plan.
The HEROES Act was enacted after 9/11 to help members of the military. The Justice Department says the law allows Biden to reduce or clear student loan debt during a national emergency. Republicans argue that the government is misinterpreting the law, in part because the pandemic no longer qualifies as a national emergency.
Justice Department attorney Brian Netter told Autrey the fallout from the COVID-19 pandemic is still rippling. He said student loan defaults have been rising over the past 2 1/2 years.
The cancellation applies to federal student loans used to attend undergraduate and graduate school, along with Parent Plus loans. Current students are eligible if their loans are paid before July 1.
Under the plan, 43 million borrowers will be eligible for some debt forgiveness, with 20 million who could have their debt forgiven entirely, the administration said.
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