Student loan - How come Student Loan Debt Relief Is Blocked


"  How come Student Loan Debt Relief Is Blocked ?  "

Student loan - How come Student Loan Debt Relief Is Blocked ?
Student loan - How come Student Loan Debt Relief Is Blocked ?

A judge denied forgiveness of student loans. What That Means for Borrowers Is This

How come Student Loan Debt Relief Is Blocked

A federal judge in Texas suspended the program, declaring it to be "an unlawful exercise of Congress's legislative power," and the Education Department has since ceased accepting new applications.

The decision is the program's biggest setback so far, postponing the debt forgiveness of up to $20,000 per borrower for 40 million debtors as a result of numerous legal challenges.

The federal student aid website states that "courts have issued rulings prohibiting our student debt reduction program." "As a result, we are not accepting applications at this time. We are attempting to have the orders reversed.

According to the White House, 26 million borrowers have already requested debt relief, and 16 million of those requests have already been granted. In a statement, White House Press Secretary Karine Jean-Pierre said that "the Department will hold onto their information so it can swiftly process their relief whenever 

Legal authorities have expressed doubt regarding the legal standing of any plaintiff—someone who has suffered a real, present harm—to successfully contest the student debt forgiveness program. A number of judges have dismissed earlier lawsuits for lack of standing, but this most recent decision broke that trend.

The Job Creators Network Foundation filed this action, alleging that the debt-forgiveness program broke the Administrative Procedure Act by failing to solicit public input on the proposal and harming two plaintiffs who didn't qualify for debt relief. Student loans owed by one of the plaintiffs are currently held privately and are not eligible for cancellation. Because the second plaintiff did not obtain a Pell Grant, which is intended to assist low-income students attend college, he was only qualified for $10,000 in debt forgiveness—not $20,000—instead.

The lawsuit claims it is "irrational, arbitrary, and unreasonable" to deny them relief and demands "an chance to express Plaintiffs' views to the Department and to provide additional comments on any proposal from the Department to cancel Student Loan Debts."

They have standing to suit since they were denied the ability to remark on the fact that they were ineligible for debt forgiveness, according to U.S. District Judge Mark Pittman, who also agreed with them.

Pittman wrote in his decision, "Plaintiffs have successfully established the impairment of a procedural privilege."

The ruling was appealed by the Department of Justice, and the 5th Circuit Court of Appeals will now review the matter.

The issue of legal standing is still up for argument as this case continues forward on appeal, according to Tara Grove, a professor at the University of Texas School of Law who specializes in the federal courts and the separation of powers. Grove claims that having legal grounds to contest this scheme is difficult.

Fundamentally, she argues, "this boils down to: Can I complain about other people obtaining benefits? "They were not prohibited from applying for assistance in this case. Simply put, they didn't comply with the program's standards.

Grove believes that the Biden Administration's strongest defense is that the plaintiffs lack legal standing to file a lawsuit, noting that the government's defense of the policy's legal justification may be more difficult to sustain.

Similar to past lawsuits, this one alleged that Biden lacked the power to provide extensive debt relief. The Higher Education Relief Opportunities for Students (HEROES) Act of 2003, which grants the Education Department the authority to alter student financial assistance programs during a "national emergency," served as the basis for the Biden administration's justification for the proposal. The COVID-19 pandemic, according to the Biden Administration, is such an emergency.

The HEROES Act "does not afford the executive branch clear congressional power to implement a $400 billion student loan forgiveness program," Pittman ruled on Thursday. (The Congressional Budget Office projected the plan's cost to be around $400 billion in a report released in September.)

In this nation, he declared, "we are not governed by an all-powerful executive with a pen and a phone."

Executive director of the nonprofit Student Debt Crisis Center, Cody Hounanian, claims the center has heard from numerous debtors who had viewed debt relief as "a light at the end of the tunnel" and are now irritated to be caught in a legal limbo.

"I identify with many of the emotions that other borrowers experience. I'm very angry right now. Hounanian, who registered for debt relief as soon as the site began, says she feels unsure and confused about what the future holds. It is challenging to plan for the future.