ST. LOUIS– A federal judge on Thursday rejected an effort by six Republican-led states to block the Biden administration’s plan to write off student loan debt for tens of millions of Americans.
U.S. District Judge Henry Autrey in St. Louis wrote that because the six states—Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina—failed to establish that they had standing, ” the Court has no jurisdiction to hear this case”.
Suzanne Gage, spokeswoman for Nebraska Attorney General Doug Peterson, said the states will appeal. She said in a statement that the states “continue to believe that they do in fact have standing to raise their significant legal challenges.”
Democratic President Joe Biden announced in August that his administration would forgive up to $20,000 in education debt for a large number of borrowers. The announcement immediately became a major political issue ahead of November’s midterm elections.
The states lawsuit is among a few that have been filed. Earlier Thursday, Supreme Court Justice Amy Coney Barrett denied an appeal by a group of Wisconsin taxpayers seeking to stop the debt forgiveness program.
Barrett, who oversees emergency appeals from Wisconsin and neighboring states, did not comment on the dismissal of the appeal from the Brown County Taxpayers Association. The group wrote in its Supreme Court filing that it needed an emergency order because the administration could begin writing off outstanding student debt as early as Sunday.
In the states’ lawsuit, attorneys for the administration said the Department of Education had “broad authority to administer federal student financial assistance programs.” A court filing said the Higher Education Student Aid Opportunity Act of 2003, or HEROES Act, allows the Secretary of Education to waive or vary the terms of wartime federal student loans. or national emergency.
“COVID-19 is such an emergency,” the filing reads.
The Congressional Budget Office said the program would cost about $400 billion over the next three decades. James Campbell, a lawyer for the Nebraska Attorney General’s Office, told Autrey in an Oct. 12 hearing that the administration was acting outside of its powers in a way that would cost the states millions of dollars.
The plan would forgive $10,000 of student loan debt for those earning less than $125,000 or households with incomes below $250,000. Pell Grant recipients, who typically demonstrate greater financial need, will get an additional $10,000 in debt forgiveness.
Conservative lawyers, Republican lawmakers and business-oriented groups have argued that Biden overstepped his authority by taking such sweeping steps without congressional consent. They called it an unfair government giveaway to the relatively well off at the expense of taxpayers who did not pursue 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 facing tough re-election contests walked away from the plan.
The HEROES Act was enacted after 9/11 to help the military. The Justice Department says the law allows Biden to reduce or forgive student loan debt in the event of a national emergency. Republicans argue the administration is misinterpreting the law, in part because the pandemic is no longer considered a national emergency.
Justice Department attorney Brian Netter told Autrey that the fallout from the COVID-19 pandemic is still reverberating. He said defaults on student loans have skyrocketed over the past 2 1/2 years.
Forgiveness applies to federal student loans used to attend undergraduate and graduate school, as well as Parent Plus loans. Current students are eligible if their loans were disbursed before July 1.
The plan makes 43 million borrowers eligible for debt forgiveness, 20 million of whom could see their debt wiped out entirely, according to the administration.