WASHINGTON (Michigan News Source) – President Joe Biden’s federal student loan forgiveness program is on hold due to a federal appeals court in St. Louis, Missouri that issued a nationwide injunction to temporarily stop the president from administering the program. The three-judge panel ruled “The injunction will remain in effect until further order of this court or the Supreme Court of the United States.”
However, the Supreme Court has already shown a propensity to stay away from the issue, having turned down two requests to block the loan program, including a request from an Indiana legal group and a Wisconsin taxpayer group.
The Missouri ruling was made regarding a legal challenge from six Republican states who argued the program threatens their future tax revenues and that the loan program circumvents congressional authority.
Days before that, a federal judge in Texas struck down the plan for Biden’s Executive Order action to cancel up to $20,000 in student debt for tens of millions of Americans which resulted in the Biden administration having to stop taking applications for the program. The applications had been collected since mid-October with more than 26 million borrowers already applying, 16 million of them already approved for the relief.
Judge Pittman of the U.S. District Court for the Northern District of Texas said, “In this country, we are not ruled by an all-powerful executive with a pen and a phone.”
White House Press Secretary Karine Jean-Pierre said, “The Administration will continue to fight these baseless lawsuits by Republican officials and special interests and will never stop fighting to support the working and middle class Americans.”
Students in Michigan are dismayed with the current circumstances.
ABC12 News in Flint talked to students in Mid-Michigan who are worried that they won’t get their relief. Jenna Marden is working on a master’s degree at Oakland University and says she has a mountain of debt. She said, “I’m going to say, I will be a little over $100,000 in the hole by the time I am done.” She continued, “I’m kind of upset because every dollar really does count. If I had to get a loan for a house or a car, I couldn’t.” She added, “I’m just trying to get my education so that I can be functional in society.”
In Detroit, WXYZ-TV talked to married couple Samer Dubaisi and his wife Sara Shaban who are both in medical school and hoping that that some of their debt is eliminated. Shaban said about the forgiveness program, “It was something that I thought was very humane for the government to do. It was like they were understanding the situations citizens were being put in right now.” Now instead of being appreciative, they are frustrated while they wait to hear about their application status.
There are more than one million other students in Michigan who are waiting to hear about their application status and the fate of Biden’s loan forgiveness program. With 1,316,000 Michiganders eligible to apply for the program, there are many students who now wait in limbo for the extra money they were hoping to keep in their pockets.
And what will that money be buying when it finally arrives from the Biden administration? According to a survey done by intelligent.com of 1,250 individuals who have applied or will apply for Biden’s student loan forgiveness plan, 73% of them intend to use the extra money for non-essentials. This spending of taxpayer dollars includes using their money for things like vacations, eating out, new technology and drugs/alcohol. 36% said they’d buy new gaming systems and 27% said they’d use the money for gambling.
This kind of spending doesn’t surprise the National Review who said, “That perfectly matches what we know about the distributional impacts of the student-debt program. People with lots of student debt are generally people with graduate and professional degrees who have relatively high incomes.”
According to the survey, four in 10 of the students surveyed said that student loans haven’t negatively affected their lives. That’s either because they can afford to pay them – OR because they haven’t had to pay them for 31 months.
Even without the loan forgiveness program, students have had their federal loan payments suspended, without interest, since March of 2020 because of the COVID-19 pandemic.
Trump had originally suspended the loan payments using Executive Action and then Congress codified the relief with the CARES Act which extended the suspension six months. However, Trump, and now Biden, have extended it multiple times.
The Washington Post reports that because of the pause on the student debt payments, President Biden is considering extending the moratorium on student debt payments once again instead of having it conclude at the end of this year.