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Federal judge dismisses Republican challenge to Biden’s student loan forgiveness plan

U.S. District Judge Henry Autrey found the six GOP states lacked standing to pursue the lawsuit, which sought to block the order that would grant between $10,000 and $20,000 of student loan relief to qualified borrowers.

ST. LOUIS (CN) — A federal judge on Thursday dismissed a bid by several Republican states to block President Joe Biden’s student loan forgiveness plan.

U.S. District Judge Henry Autrey, a George W. Bush appointee, entered the 19-page decision finding the six states lacked standing, eight days after a two-hour hearing.

“It should be emphasized that ‘standing in no way depends upon the merits of the plaintiff[s’] contention that the particular conduct is illegal," Autrey wrote. “While plaintiffs present important and significant challenges to the debt relief plan, the current plaintiffs are unable to proceed to the resolution of these challenges.”

Biden’s plan would grant between $10,000 and $20,000 of student loan relief to qualified borrowers.

Six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — filed a lawsuit in September seeking to stop the program unveiled by Biden in August. The lawsuit argued the plan will hurt an already struggling economy and will provide no relief to the working class and the poor.

The defendants could not be reached for comment after hours Thursday.

Autrey took issue with several standing arguments made by the Republican coalition.

The Higher Education Loan Authority of the State of Missouri (MOHELA) claimed it would suffer several financial harms from the plan.

“Missouri has not met its burden to show that it can rely on harms allegedly suffered by MOHELA,” Autrey wrote. “MOHELA, not the state, is legally liable for judgments against it. MOHELA cannot pay any debt of the state, and the state is in no way obligated to pay any debt that it incurs.”

Arkansas and Nebraska argued it would suffer harms due to the plan’s incentive to consolidate loans under the Federal Family Education Loan Program (FFELP) into loans under the Direct Loan Program at no cost.

“However, the student debt relief plan at issue here is separate from a borrower’s ability to consolidate,” Autrey wrote. “Borrowers are still able to consolidate FFELP loans into Direct Loans … Because plaintiffs seek only prospective relief, they must articulate an ongoing injury. The lack of the ongoing incentive to consolidate defeats the claims of Arkansas and Nebraska as set forth below.”

Nebraska, Iowa, Kansas and South Carolina claimed damages in the form of lost future tax revenue.

Autrey, once again, was not swayed.

“These future lost tax revenues are merely speculative,” Autrey wrote. “Moreover, there is nothing imminent about what may happen several years in the future. The department’s student loan debt relief plan does not prohibit the states from proposing, enacting or implementing legislation. These states’ sovereign power to set its own tax policy is not implicated by the student debt relief plan, and their legislatures are free to propose and pass tax revenue plans as they see fit.”

The dismissal came on the same day the Supreme Court rejected a similar attempt to block the plan out of Wisconsin.

That challenge came from a conservative law firm representing Wisconsin taxpayers and claimed Biden had overstepped his authority by absolving tens of millions of Americans' loan debt.

Justice Amy Coney Barrett — who is assigned emergency applications for Seventh Circuit cases — denied the application without asking for any additional briefing from the Biden administration or referring the case to the full court and did not provide an explanation for her ruling on the application. 

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