BIDEN’S $475B Student Loan BAILOUT BLOCKED by Federal Appeals Court
Federal Courts BLOCK President BIDEN’S BAILOUTS
More than a year after the Supreme Court invalidated President Biden’s $430 billion debt forgiveness plan, a federal appeals court on Thursday prevented the administration from carrying out a revised student loan bailout.
Following an earlier decision by federal judges in Kansas and Missouri, the 8th US Circuit Court of Appeals, located in St. Louis, granted a request by seven states led by Republicans to halt a portion of Biden’s $475 billion plan to erase student debt.
The Education Department was prevented from issuing additional loan forgiveness under the administration’s Saving on a Valuable Education (SAVE) Plan by the preliminary injunctions issued last month by US District Judges John Ross in St. Louis and Daniel Crabtree in Kansas City. However, this did not apply to the $5.5 billion in loan forgiveness that Biden had already canceled.
Last Monday, a collection of state attorneys general, headed by Missouri AG Andrew Bailey, filed a motion with the 8th Circuit to halt it.
Bailey wrote in an X post that the idea “would have saddled working Americans with half a trillion dollars in Ivy League debt” and that the decision was a “huge win for every American who still believes in paying their way.”
The Republican-led states subsequently petitioned the Supreme Court to intervene and restore the injunction after the Denver-based 10th US Circuit Court of Appeals placed a portion of Crabtree’s ruling on hold.
A representative for the Education Department responded in a statement, “Our Administration will continue to aggressively defend the SAVE Plan— which has been helping over 8 million borrowers access lower monthly payments, including 4.5 million borrowers who have had a zero dollar payment each month.”
According to the most recent rulings, none of the billions of dollars in forgiven payments had to be repaid. On July 1, the plan was supposed to go into full force.
Bill Cassidy, the ranking member of the Senate Health, Education, Labor and Pensions Committee (R-La.), praised the decision as “another rebuke to President Biden’s illegal student loan schemes,” along with other Republicans.
He does not “forgive” debt. One of Biden’s harshest critics on the subject, Cassidy, claimed, “He is taking the debt from those who willingly took it out to go to college and transferring it onto taxpayers who decided not to go to college or already paid off their loans.”
Over the following ten years, the anticipated cost of Biden’s SAVE plan to US taxpayers is as high as $475 billion. The income-based repayment plan removes monthly payments for those making minimum wage and reduces monthly student loan payments by half. Additionally, after ten years of payments, student borrowers who owe $12,000 or less get their outstanding debt forgiven.
In June 2023, the Supreme Court invalidated Biden’s initial effort at the SAVE plan. The conservative justices on the court ruled that the president had unconstitutionally wiped off up to $20,000 in debt for as many as 43 million Americans.