Student borrowers should always seek relief, says Cardona
Biden’s plan met its first substantive hurdle Friday night, when the United States Court of Appeals for the 8th Circuit granted an administrative stay for one of the lawsuits, filed by six Republican-led states. The administrative suspension is not a decision on the merits of the case, but rather a temporary pause until the court decides.
Until Friday, it appeared that the Biden administration was dodging legal challenges targeted by Republicans against its debt relief plan. A U.S. District Judge had on Thursday dismissed the States’ lawsuit for lack of standing, the same day Supreme Court Justice Amy Coney Barrett dismissed a separate lawsuit brought by a conservative legal institute on behalf of an association of Taxpayers, who argued that the debt relief was unconstitutional because its goals of closing the racial wealth gap amounted to an “inappropriate racial motive.”
The six Republican-led states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – argued that debt relief would lead to lower revenue from loans that were due to be forgiven. Judge Henry E. Autrey of the U.S. District Court for the Eastern District of Missouri wrote in his order that concerns about lost tax revenue were “merely speculative.”
In an op-ed published Saturday in USA Today, Cardona took issue with Republicans’ argument, saying they don’t dispute the billions of dollars in pandemic aid for business owners in their states, with cuts to taxes for high earners or with a loan forgiveness that helped Republican members of Congress. “It’s only when relief goes to American workers and middle classes that these elected officials have a problem,” he wrote.
Despite the lawsuits, Cardona has encouraged eligible borrowers to apply for relief as the Department of Education moves “at full speed in preparations for the legal implementation of our program so that we can provide relief to borrowers who need it most,” he wrote.
In August, Biden announced plans to forgive up to $10,000 in federal student debt for people earning up to $125,000, or up to $250,000 for married couples. Pell Grant recipients are eligible for an additional $10,000. Requests for relief are open until the end of next year, although the administration has encouraged borrowers to apply earlier in the hope cancellations could hit accounts before a break expires on student loan repayments on December 31.
University of Alabama law professor Luke Herrine, who has argued the president has the power to write off student debt on a large scale, said debt relief could still come soon despite the federal appeals court hurdle. Herrine said that while the appeals court’s decision was uncertain, “I would expect them to affirm the district court’s decision” against the Republicans’ lawsuit.
He said he expected a decision from the appeals court “at least within a few weeks” given that the suspension was “an urgent request”.
Borrowers seeking relief should still apply despite the legal noise, he said. “If you get your app now, you’re more likely to get relief,” Herrine said. “There is no harm in applying,” he added.
Danielle Douglas-Gabriel and Kelly Kasulis Cho contributed to this report.