Biden student debt forgiveness plan on temporary hold after appeals court ruling
By ARIANA FIGUEROA AND
"It is also important to note that the order does not reverse the trial court's dismissal of the case, or suggest that the case has merit. It merely prevents debt from being discharged until the court makes a decision.
"We will continue to move full speed ahead in our preparations in compliance with this order. And, the Administration will continue to fight Republican officials suing to block our efforts to provide relief to working families."
Biden on Friday, during a speech at
"Republican members of
A federal judge earlier had rejected efforts by the six states to block the Biden administration's plan to forgive up to
The six states led by
On Thursday, U.S. District Judge
The lawsuit was filed on behalf of
The lawsuit is one of several legal challenges faced by the loan-forgiveness plan. Another of those challenges, mounted by a conservative taxpayer-advocacy group, suffered a setback Thursday when
Under the Biden administration's plan, student-loan borrowers can qualify for up to
The Biden administration's defense of the program is grounded in a 19-year-old federal law that gives the secretary of education the power "to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies." The administration argued in court that this is the same law the Trump administration used to pause student-loan payments at the beginning of the COVID-19 pandemic.
The states argued the financial implications of Biden's
They pointed out that some states don't consider discharged student-loan debt to be "income" that can be taxed, further depriving the states of revenue.
During oral arguments, according to the Missouri Independent, lawyers for the Biden administration said the potential loss of tax revenue isn't enough to give the states standing in the case, especially since the states are free to expand their definition of taxable income to include the canceled student-loan debt.
In his decision,
Autrey had previously signaled that the states' standing to bring the case forward was likely to be a factor in his decision.
"It is hard to make a cake if you don't have a pan to put that cake in," Autrey said during oral arguments. "That pan is standing. It doesn't matter if you have all the ingredients."
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