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1 Dec, 2022 05:12

Court strikes blow against Biden’s student debt scheme

The White House’s proposed loan forgiveness plan is expected to cost US taxpayers up to $400 billion
Court strikes blow against Biden’s student debt scheme

A US federal court has struck down President Joe Biden’s request to overturn a previous ruling which blocked the rollout of his major student debt relief program, potentially setting up a showdown at the Supreme Court as the White House pursues multiple appeals.

A three-judge panel at the US Court of Appeals for the 5th Circuit rejected the administration’s latest request on Wednesday, saying that a prior order to halt the debt forgiveness scheme would stand. 

The earlier ruling by District Judge Mark Pittman said Biden’s plan to cancel billions of dollars in student debt was an “unconstitutional exercise of Congress's legislative power,” deciding in favor of two plaintiffs who argued the program was unlawful and did not follow “proper rulemaking processes.”

While the 5th Circuit Court refused to vacate Pittman’s decision on Wednesday, it did order that Biden’s appeal be heard on an accelerated basis.

The St. Louis-based 8th US Circuit Court of Appeals has also imposed an injunction prohibiting the Department of Education from going forward on the debt plan, prompting the Biden administration to file yet another appeal with the Supreme Court. 

Though the nation’s highest judicial body is still reviewing the request, Wednesday’s ruling may also be appealed at the Supreme Court, which could decide to combine the two related cases.

Having frequently spoken of student debt relief while campaigning for the 2020 presidential race, last August Biden announced that the government would forgive up to $10,000 in student loans for borrowers making less than $125,000 per year, while some lower-income students who received college grants could have up to $20,000 in debt erased. With some 26 million Americans applying for student loan forgiveness, the Congressional Budget Office has estimated the program would cost up to $400 billion.