Federal Court Temporarily Halts Biden’s Student Loan Forgiveness Plan

Federal court ordered a temporary halt to President Joe Biden’s Student Loan Forgiveness Program. This will allow the judges time to consider legal challenges.

Henry Autrey was rebuked by six Republican generals from the states a day before. Although the case raised “important and significant challenges” to Biden’s student debt relief plan, Autrey ultimately ruled that the state governments lacked standing—that is, the right to bring a case based on a demonstration of harm and potential remedy.

The decision was appealed immediately to the Eighth Circuit Court of Appeals, St. Louis. On Friday night, the court issued an administrative stay. According to the court’s order, Biden Administration was instructed by the court not to continue with debt relief plans until the full case review has been completed.

Karine Jean-Pierre, White House Press Secretary stated in a statement that this ruling does not bar student loan borrowers who wish to get their debts forgiven.

The order does not overturn the decision of the trial judge or suggest the merits of the case. “It merely stops debt from being discharged till the court makes its decision,” she stated. We will not stop moving forward with our preparations to comply with this order.”

Establishing standing is the first major hurdle in any legal challenge to the student debt plan—and it has proven to be a difficult one to clear. A suit filed last month by the Pacific Legal Foundation (“PLF”), a libertarian law company was also dismissed by a federal court for lack of standing. A challenge made by a Wisconsin-based tax advocacy group was rejected without explanation by the U.S. Supreme Court on Friday.

Part of the problem is that the student debt relief plan seems to be a moving target—the administration has adjusted the rules and eligibility for the program several times since it was announced in August. The administration made one change, apparently in response to PLF’s lawsuit. It removed automatic approval of student loan forgiveness. This means that students who are financially affected by the removal of their debt do not have to sue. They can simply opt out.

The taxpayer will be paying $400 billion for the Biden student loan forgiveness program. This is to transfer an incredible amount of wealth to those who are most often already very well-off. The whole thing is based on a legally dubious reading of a post-9/11 law that allowed the president to forgive student loans for first responders—and rest on Biden’s pandemic emergency powers, despite his own admission that the pandemic is over. This must be a matter for someone to sue.

It’s not an exaggeration to say that a federal judge has stated there are important and substantial issues the courts must resolve here. Friday’s Eighth Circuit order on Friday should only be the beginning of a legal investigation into this costly, unneeded, and potentially legally fraught proposition.