On Monday, an appeals court ruled that the temporary stay blocking Joe Biden’s student loan forgiveness plan, which would cancel up to $20,000 in student debt per borrower, would be converted into an injunction, postponing the plan indefinitely. The ruling was made by the Eighth Circuit Court of Appeals in response to a lawsuit brought by six Republican-led state governments — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina, which claimed that debt forgiveness would hurt them economically.
The Republican plaintiffs deliberately brought their lawsuits in the district covered by the Eighth Circuit so that any appeal of the lower court’s decision by either side would be brought before one of the most right-wing appeals courts in the country. All but one of the Eighth Circuit’s eleven active justices have been appointed by Republicans, including four appointed by Donald Trump. The three-judge panel that issued the ruling on Monday consisted of two Trump appointees and one George W. Bush appointee.
Biden announced the Student Debt Relief Program in August, issuing an executive order based on a 2003 federal law allowing the Secretary of Education to modify student financial assistance programs “in connection with a war, other military operation, or national emergency.” This law was first cited by the Trump administration to suspend student loan debt payments during the COVID-19 pandemic. The debt moratorium is set to expire at the beginning of 2023.
Monday’s appeals court ruling came on the heels of a Texas federal judge appointed by Trump last Thursday overturning Biden’s student loan plan. Judge Mark Pittman, ruling in a lawsuit separate from the one brought by Republican-led states, claimed that Biden’s executive action creating the program is an illegal encroachment on congressional power. This is a totally hypocritical statement from the same alt-right championing the authoritarian “unified operational theory,” which radically attacks the constitutional principle of separation of powers and claims that the president has unilateral power to wage war, imprison, and even kill alleged terrorists. Terrorists and “unlawful enemy combatants”, including US citizens.
Bateman’s decision stopped accepting new orders and processing pending orders. Some 16 million applications had already been approved at the time of the ruling, with 26 million people already applying.
Monday’s appeals court ruling focused on the impact of Biden’s plan on the Missouri Higher Education Loan Authority (MOHELA), a private company based in St. Louis, Missouri, created by the state in 1981 after the model of Freddie Mac. It is one of the largest student loan holders and servicers in the country, providing student loans to 2.7 million beneficiaries.
The ruling said: “Mohla allegedly receives revenue from the accounts it serves, and the total revenue that Mohla recovers will decrease if a significant portion of its accounts are no longer active under the Secretary’s plan. This unexpected fiscal contraction will prevent Missouri or delay funding for higher education.” in its public colleges and universities.
He continues: “In view of the financial obligations of the Department of Finance to the state treasury, the cancellation of the debts of the challenged student represents a threatening financial detriment to the state of Missouri.”
Nothing is said about the “financial damage” that $1.7 trillion in student debt imposes on 43 million borrowers (less than a quarter of them are covered by the Biden plan).
This same argument had previously been rejected by a county judge, who said, “Missouri has not met the burden of showing that it can rely on the damages it is alleged to have suffered mohla.muddy, not the state, is legally responsible for the sentences against it.”
The DOH itself stated it was not involved in the case, saying on November 2, “DOH executives were not involved in the Missouri Attorney General’s Office’s decision to file a preliminary injunction in federal court on September 29, 2022.”
The argument is mainly to protect the sacred right of loan service companies to maximize the profits made from the backs of indebted students. It has nothing to do with protecting the public that states claim to represent.
The ruling shows that even the most modest social reform is not possible under a two-party system of capitalism, which, on the contrary, is geared towards cuts in essential programs such as Social Security and Medicare.
Biden did not bring his student loan plan before Congress because he knew it would fail, not only because of blanket opposition from Republicans, but also because a section of the Democratic Party opposed it. During the midterm election campaign, Colorado Sen. Michael Bennett declared his opposition, as did Congressman Tim Ryan of Ohio, who failed in his Senate race against Trump-backed J.D. Vance.
While the political establishment will not allow even a modest reduction in student debt, Biden is asking for another $37.7 billion to fund the proxy imperialist war against Russia in Ukraine. The United States has already allocated $66 billion in military aid to Ukraine this year alone.
The ruling class has endless money for a war, which threatens to go nuclear, but supposedly no money to relieve the crushing debt burden of young students. According to the Congressional Budget Office, Biden’s plan would cost $400 billion over 30 years, which works out to $13.3 billion annually, one-third of the additional money Biden is asking for for the war, and one-sixth of the money already committed. general.