Appeals Court Blocks Remaining Provisions of Biden Student Debt Forgiveness Plan

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Facts

  • The US 8th Circuit Court of Appeals granted a motion by Republican-led states to block the remaining pieces of the Biden administration's student loan forgiveness plan.1
  • A district judge last month stopped short of blocking the Saving on a Valuable Education (SAVE) Plan entirely. This motion, brought forth by a group of Republican attorneys general, would block the rest.2
  • While the previous ruling allowed the lowering of monthly payments for borrowers to come into effect, this week's argued that scrapping payments for those under a certain income and forgiving loans after 10-25 years of payments in certain instances is unlawful.3
  • The complaint was filed on behalf of Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio, and Oklahoma. The Biden administration has forgiven over $168B in debt for nearly 5M borrowers.4
  • The same day that the ruling was announced, the White House forgave $1.2B for 35K public servants under the Public Service Loan Forgiveness, which includes teachers, nurses, and first responders.5
  • The two June injunctions that paused some portions of the plan ruled that the Department of Education (DOE) lacks a mandate from Congress to forgive debt and that loan forgiveness illegally stripped states of revenue. The DOE says it will 'aggressively defend' the SAVE Plan, as the ruling is not final.5

Sources: 1Associated Press, 2Reuters, 3Politico, 4Axios and 5The Hill.

Narratives

  • Republican narrative, as provided by Washington Examiner. The student debt relief plan is a bad policy that was rammed through without any due process. Indeed, It was so bad that two judges appointed by Obama had to put a stop to it for its unconstitutional nature. Loan forgiveness is a handout to the upper classes and punishes those who were diligent and paid their loans off in time. Hopefully, the courts will finally stick a fork in this unconstitutional plan soon.
  • Democratic narrative, as provided by New York Times. These GOP-led states have been relying on bad logic to try and trash the SAVE Plan, as analysis has shown that states won't lose revenue in the aggregate specifically because of the plan. These states haven't let a lack of injury stop them from using the courts to make it harder for millions of hardworking Americans to discharge burdensome debt that is keeping them from financial security.

Predictions