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Two federal judges block Biden student loan bailout 

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July 1, 2024

Two federal judges block Biden student loan bailout

by LU Staff
LibertyUnyielding.com


World's largest gavel, outside courthouse in Columbus, Ohio

“Two federal judges issued orders temporarily blocking President Joe Biden’s new student loan forgiveness plan” last week, reports The College Fix.

Missouri Attorney General Andrew Bailey trumpeted a June 24 ruling against the plan by a federal district judge in St. Louis, calling it a “huge win.” Bailey said, “The Constitution makes clear that Joe Biden does not get to thwart Congress when it suits his political agenda. The Constitution will continue to mean something as long as I’m Attorney General.”

17 states are suing to stop the Biden administration’s new student loan bailout, Saving on a Valuable Education Plan, in two different lawsuits. The program is an income-based student loan repayment plan that grants full loan forgiveness to certain borrowers.

According to Politico,

District Judge John A. Ross of the Eastern District of Missouri blocked the Education Department from carrying out “any further loan forgiveness for borrowers” under the SAVE program until he decides the full case.

Ross ruled that Missouri Attorney General Andrew Bailey and other GOP states who sued were likely to succeed on their claims that the Biden administration lacks the authority to forgive student debt under the SAVE program.

He agreed that the program’s loan forgiveness provisions would likely harm Missouri because it would reduce the fees that the Education Department pays to the Missouri Higher Education Assistance Agency.

A federal judge in Kansas City, Daniel Crabtree, issued a ruling on June 24 blocking parts of Biden’s bailout in response to a different lawsuit by Kansas Attorney General Kris Kobach. The Kansas City Star reports that Crabtree ruled “the Department of Education overstepped its authority with the scope of its new rule, because it goes beyond numbers specifically set by Congress.”

“Kansas’s victory today is a victory for the entire country. As the court correctly held, whether to forgive billions of dollars of student debt is a major question that only Congress can answer. Biden’s administration is attempting to usurp Congress’s authority,” Kobach declared on the social media site formerly known as Twitter. Biden’s plan “is not only unconstitutional, it’s unfair. Blue collar Kansas workers who didn’t go to college shouldn’t have to pay off the student loans of New Yorkers with gender studies degrees,” he said.

By contrast, President Biden’s press secretary, Karine Jean-Pierre said that these rulings won’t stop Biden for writing off student loans. “Today’s rulings won’t stop our Administration from using every tool available to give students and borrowers the relief they need. That’s why the Department of Education will continue to enroll more Americans in SAVE and help more students and borrowers access the benefits of the plan that remain available,” she said

An April 2024 report by the Committee for a Responsible Federal Budget estimates Biden’s student loan bailouts, put together, “will cost a combined $870 billion to $1.4 trillion.”

After the Supreme Court ruled last year that Biden’s attempt to cancel $500 billion in student loan debt was illegal, Biden canceled some of the same debt using new excuses, writing off billions more in student loans. In April, 17 states sued the Biden administration over its new plans to cancel student loans, arguing that Biden’s new plan was illegal, too.

Canceling student loans is a bad idea. It encourages colleges to jack up tuition, by making it more attractive to take out big loans to cover college tuition. When students are willing to borrow more to go to college, colleges respond by raising tuition. The Daily Caller notes that “each additional dollar in government financial aid translated to a tuition hike of about 65 cents,” according to the Federal Reserve Bank of New York.

Canceling student loan debt is “regressive and unfair,” says Katherine Abraham, a former adviser to Obama who served as Commissioner of the Bureau of Labor Statistics during the Clinton administration. As Greg Price points out, “Only 37% of Americans have a 4-yr college degree, only 13% have graduate degrees, and a full 56% of student loan debt is held by people who went to grad school. Biden’s plan to cancel it would be like taking money from a plumber to pay the debt of a lawyer.” Even the liberal Washington Post called Biden’s student-loan bailout “a regressive, expensive mistake.”

Student loan forgiveness also is inflationary. Jason Furman, chairman of President Obama’s Council of Economic Advisers, called Biden’s plan to cancel student loans “reckless.” Furman said, “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” Biden’s student loan forgiveness will increase inflation, inequality, tuition, and the national debt.

The Wall Street Journal criticized Biden’s new plan to write off student loans after the Supreme Court ruled against his old plan, arguing that the new plan “will encourage colleges to raise costs, especially in graduate programs for which there are no federal loan limits. Who cares if students can’t repay? They will be forgiven one way or another.”

The Supreme Court’s 2023 ruling against Biden’s earlier loan-forgiveness plan was expected by most observers. Some of them accused Biden of currying favor with young voters by promising student loan forgiveness that he knew was illegal and would be struck down, thus giving them false hope. Biden sought to deny this, saying “I didn’t give any false hope. The Republicans snatched away the hope that they were given.”

But that was dishonest on Biden’s part. Earlier, he himself had admitted he lacked the power to forgive student loans en masse. The president said of student loan cancellation during a 2021 CNN town hall, “I don’t think I have the authority to do it by signing with a pen.”

Other Democratic Party leaders used to admit that Biden lacks the power to forgive student loans, the very ones denouncing today’s Supreme Court decision. On July 28, 2021, “then-Speaker of the House Nancy Pelosi explained: ‘People think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.”

As journalist Charles Cooke noted in 2023, “Biden knew this was illegal. Everyone knew this was illegal. That he tried to do it anyway, in violation of his oath of office, remains a monumental disgrace.”

http://libertyunyielding.com/2024/07/01/two-federal-judges-block-biden-student-loan-bailout/

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