Federal judges in Kansas and Missouri on Monday blocked much of the Biden administration. student loan repayment plan which offers a faster cancellation path and lower monthly payments for millions of borrowers.
The judges’ rulings prevent the U.S. Department of Education from helping many potential borrowers ease the burden of repaying their loans, under a rule that takes effect July 1. The decisions do not cancel assistance already provided to borrowers.
In Kansas, U.S. District Judge Daniel Crabtree ruled a lawsuit filed by the state attorney general, Kris Kobach, on behalf of his state and 10 others. In his decision, Crabtree authorized parts of the program that allow students who borrowed $12,000 or less to have the remainder of their loans forgiven if they make payments over 10 years, instead of the usual 25.
But Crabtree said the Department of Education would not be allowed to implement parts of the program intended to help students who had larger loans and could have their monthly payments reduced and their required payment period reduced by 25 years at 20 years.
In Missouri, U.S. District Judge John Ross’ order applies to different parts of the program than Crabtree’s. His order states that the U.S. Department of Education cannot forgive loan balances in the future. He said the ministry could further reduce monthly payments.
Ross issued the ruling in a lawsuit filed by Missouri Attorney General Andrew Bailey on behalf of his state and six others.
Together, the two rulings, each issued by a judge appointed by former President Barack Obama, a Democrat, appear to significantly limit the scope of the Biden administration’s efforts to help borrowers after the U.S. Supreme Court rejected last year the Democratic president’s first attempt at a pardon. plan. Both judges said Education Secretary Miguel Cardona overstepped the authority granted by Congress in laws dealing with student loans.
Bailey and Kobach each hailed their state judge’s ruling as a major legal victory against the Biden administration and argue, as many Republicans do, that canceling some student loans shifts the cost of paying them back onto taxpayers .
“Only Congress has the authority to manage finances, not the president,” Bailey said in a statement. “Today’s decision is a huge victory for the rule of law and for every American that Joe Biden was about to force to pay off someone else’s debt.”
The White House said it strongly disagreed with the justices’ rulings and would continue to defend the program and use all available tools to ease costs for students and borrowers.
In a statement, White House Press Secretary Karine Jean-Pierre said the Biden administration “will never stop fighting for students and borrowers – no matter what obstacles Republican elected officials and special interests put us on the road.
In a statement posted on the social media platform XLeaders of the Student Borrower Protection Center, which advocates for the elimination of student debt, called the decisions “partisan legislation” and “a recipe for chaos in the student loan system.”
“Millions of borrowers are now in uncertainty as they struggle to make sense of their rights under the law and information provided by the government and their student loan companies,” said the executive director of the band, Mike Pierce.
In both lawsuits, the suing states sought to invalidate the entire program, which the Biden administration had proposed. made available for the first time to borrowers in July 2023, and at least 150,000 had their loans canceled. But the justices noted that the suits were not filed until late March in Kansas and early April in Missouri.
“The court therefore fails to see how plaintiffs can claim irreparable harm on their part,” Crabtree wrote in his opinion.
Both orders are preliminary, meaning the injunctions imposed by the judges would remain in effect until the separate lawsuits go to trial. However, to issue a temporary order, each judge had to find that the states had a strong chance of prevailing at trial.
Kobach called the Biden plan “unconstitutional” and an affront to “blue-collar workers in Kansas who didn’t go to college.”
There was a certain irony in Crabtree’s decision: Kansas is no longer a party to Kobach’s lawsuit. Earlier this month, Crabtree ruled that Kansas and seven other states in the lawsuit — Alabama, Idaho, Iowa, Louisiana, Montana, Nebraska and Utah — could not prove they had been harmed by the new program and dismissed them as plaintiffs.
That left Alaska, South Carolina and Texas, and Crabtree said they could sue because each has a state agency that handles student loans.
But Crabtree said reducing monthly payments and shortening the payment period required to obtain loan forgiveness “goes beyond any generosity that Congress has previously authorized.”
In the Missouri ruling, Ross said repayment schedules “are well within the reach” of the department, but that the “plain text” of U.S. law does not give it the authority to cancel the loans until 25 years have passed. payments.
Missouri also has an agency that services student loans. Other states affected by this lawsuit are Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.
