Authored by Tom Ozimek via The Epoch Times,
A federal judge has extended the restraining order blocking the Biden administration’s latest student loan forgiveness initiative, referred to in court filings as the “Third Mass Cancellation Rule.”
This extension follows allegations from a coalition of states claiming that the program is being implemented secretly without proper public notice or approval.
In the ongoing lawsuit led by Missouri against the Department of Education, U.S. District Judge Randal Hall ruled on Sept. 19 that there was “good cause” to prolong the temporary restraining order—which he initially issued earlier in the month—by an additional 14 days.
The extension follows a hearing where both sides presented arguments on competing motions—the plaintiffs seeking a preliminary injunction and the defendants pushing for the case’s dismissal.
Missouri Attorney General Andrew Bailey called the decision a “huge win” in a Sept. 18 social media post following the judge’s in-court decision, which was formalized in the order issued the following day.
In his written order, the judge explained that the extension allows the court time to thoroughly review the arguments presented in briefs and oral submissions before ruling on the broader motions.
The case stems from a lawsuit filed on Sept. 3 in the U.S. District Court for the Southern District of Georgia by seven states: Alabama, Arkansas, Florida, Georgia, Missouri, North Dakota, and Ohio.
The complaint names Education Secretary Miguel Cardona, the Department of Education, and President Joe Biden as defendants. The states allege that documents reveal Cardona is “unlawfully trying to mass cancel hundreds of billions of dollars” in student loans and has “quietly” instructed federal contractors to start the cancellation process as early as Sept. 7, potentially wiping out as much as $73 billion overnight, with further cancellations to follow.
The complaint further alleges that the real cost of the “Third Mass Cancellation Rule” program could reach $146.9 billion, adding to the $475 billion estimated cost of the Saving on a Valuable Education (SAVE) program that Cardona first proposed in August 2022.
“This is the third time the Secretary has unlawfully tried to mass cancel hundreds of billions of dollars in loans,“ the states’ complaint reads.
”Courts stopped him the first two times, when he tried to do so openly. So now he is trying to do so through cloak and dagger.”
The plaintiffs allege that Cardona’s third attempt at loan forgiveness is both the most aggressive and the least legally defensible.
Unlike prior attempts—such as with the SAVE plan, in which there was at least some transparency and litigation pauses—this latest move allegedly bypasses legal requirements, such as the 60-day notice rule, according to the complaint.
The Biden administration’s first attempt to cancel student loans was blocked when the U.S. Supreme Court ruled against using the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act to authorize debt forgiveness.
The second attempt, related to the SAVE Plan, was halted by an Aug. 9 decision of the U.S. Court of Appeals for the Eighth Circuit, which the Supreme Court declined to overturn later in August.
The SAVE program aims to reduce monthly payments for millions of eligible borrowers based on their income levels and to accelerate student loan forgiveness. An estimated 8 million borrowers signed up for the program. Under SAVE, borrowers with lower incomes could qualify for significantly reduced or even zero monthly payments, while accrued interest on these loans would no longer be charged.
However, the Eighth Circuit found that Missouri and the other states challenging the program are likely to succeed in their claim that the SAVE plan violates the major questions doctrine. This legal principle requires courts to assume that government agencies cannot make significant policy decisions—especially those with far-reaching economic impacts—without clear authorization from Congress.
As a result, the Eighth Circuit issued a temporary, nationwide injunction that halts the federal government’s ability to forgive student loan principal or interest under the SAVE plan. The injunction also suspends the provisions that prevent interest from accruing on loans and those that allow borrowers to make reduced or zero payments based on their income.
The Supreme Court declined to reinstate the SAVE plan, leaving the case to proceed in the lower court, where the case remains pending. Most recently, on Sept. 10, the court granted the solicitor general of Missouri more time to file briefs in the case.
The Department of Education did not respond to The Epoch Times’ request for comment by publication time.
Tyler Durden
Fri, 09/20/2024 – 18:25
