Student Loan Bailout Gets Paused, For Now

Student Loan Bailout Gets Paused, For Now

Student Loan Bailout Gets Paused, For Now

In a late Friday ruling, the Eighth Circuit Court of Appeals put a temporary stop to the Biden student loan debt bailout program. Will this be the first step in getting the case before the Supreme Court and stopping this insanity?

As we have covered on the blog, this entire student loan debt “forgiveness” scheme is illegal, and the twisted legal pretzel that the Biden administration has concocted in order to justify doing it has been contradicted by Joe Biden himself. The problem was, even though it was illegal, someone with “standing” – the ability to prove in court that they would be harmed by this bailout – has to be the one to file. Congress could do it, but not under Nancy Pelosi and Chuck Schumer. A case through the Pacific Legal Foundation looked solid for standing, until the Biden administration changed the rules in order to allow certain people already enrolled in specific debt reduction programs to opt out. That lawsuit is still in process before the courts.

The lawsuit that finally got a temporary halt while seeking an injunction was the one filed by six states with Republican attorney generals, who made the argument that Biden cannot unilaterally cancel student debt, as that is the purview of Congress, not the Executive Branch.

The U.S. Court of Appeals for the 8th Circuit ordered the Biden administration to not begin cancelling student loan debt after millions of people began signing up for the program.”

The court granted an administrative stay while it considers a request for an injunction from six states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — that are seeking to block Biden’s program. The states say that Biden did not have the right to act without congressional approval.”

It is worth pointing out that the states’ case was initially denied by the federal court in St. Louis before being appealed to the Eighth Circuit.

The pause comes one day after Judge Henry E. Autrey of the Federal District Court in St. Louis rejected the states’ claim for lack of standing.”

“While plaintiffs present important and significant challenges to the debt relief plan,” Judge Autrey wrote, “the current plaintiffs are unable to proceed to the resolution of these challenges.”

The appeals court, on the other hand, allowed the pause on any bailouts while the case is heard. However, Team Biden is still telling people to sign up for their free money!

The action puts any debt cancellation on hold until the court can rule on the states’ request for an injunction preventing the government from discharging debts. The court set a Monday deadline for the government to submit its response to the states’ filing, and a Tuesday deadline for the states to respond.”

“The order does not reverse the trial court’s dismissal of the case, or suggest that the case has merit,” Karine Jean-Pierre, the White House press secretary, said late Friday. “It merely prevents debt from being discharged until the court makes a decision.”

She encouraged borrowers to continue applying at Nearly 22 million people — more than half of all those expected to be eligible — have applied since the system opened late last week.”

Again, the problem of standing keeps coming up again and again. Even the judge who initially dismissed the states’ case pointed out that they had “important and significant challenges” to the entire student loan debt bailout. He just didn’t think these six states had standing. As we know, the administration has already manipulated the game by changing the rules at the last minute to knock the Pacific Legal Foundation’s standing in their lawsuit. By the time that Congress changes hands and would be willing to sue, it might be too late. Once that money is given out, there is going to be little recourse, or political will, to get it back. And without this last-minute delay granted by the Eighth Circuit, the administration was planning to start “canceling” debt as soon as tomorrow. With this temporary injunction in place, the states will at least have a chance to make what everyone seems to agree is a good case. The court just doesn’t seem to know who, besides Congress, has standing to actually complain about the result.

In the long term, this might be the best outcome for Joe Biden, as he will be able to complain about Republicans not letting him play Santa Claus with taxpayer money, and we all avoid the addition to the debt that this bailout would cause. In the short term, this is a blow to Team Biden, who had counted on getting this money to bribe voters in order to avoid a midterm wipeout. And yes, the whining has already begun.

Now, we get to wait and see if these six states have “standing” enough to take on the Department of Education and the Biden administration – and how long it will take before this case is fast-tracked to the Supreme Court.

Featured image via succo on Pixabay, cropped, Pixabay license

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