Biden Admin Warns Of Bankruptcy Surge As It Asks Supreme Court To Resume Student Debt Forgiveness Plan
Biden’s student loan forgiveness plan is going to the Supreme Court.
After Biden’s plan to buy votes in exchange for forgiving a portion of one’s student loan was halted by two federal courts in recent weeks, both of which found it to be unconstitutional, the admin’s Justice Department is asking for quick action to block both rulings and allow the plan to take effect even as it plays out in the nation’s courts.
As a result, the White House plans to ask the Supreme Court to reinstate the president’s student debt cancellation plan, according to a Thursday legal filing warning that :Americans will face financial strain if the plan remains stalled in court” when loan payments are scheduled to restart in January.
In a legal filing Thursday, the administration announced plans to appeal one of those rulings, by a federal appeals court in St. Louis, to the nation’s highest court. It also said it’s prepared to appeal the other case if needed.
The White House has said it will prevail, but even supporters of the plan worry about its chances before a conservative Supreme Court that has scaled back Biden’s authority in other ways, including in a June decision curbing the Environmental Protection Agency’s ability to limit power plan emissions.
Keeping the debt relief on hold would leave the government with an “unnecessarily perilous choice,” the administration argued in its filing. If it restarts student loan payments as planned on Jan. 1, millions of Americans will get billed for debt that was promised to be canceled. Which probably means the president should not have promised to cancel it; meanwhile if the government extends the payment pause, it will cost billions of dollars in lost revenue. It builds on arguments the administration made in other filings this week, warning that many Americans won’t be able to pay their student debt bills in January if the cancellation plan remains halted.
Biden’s plan promises $10,000 in federal student debt forgiveness to those with incomes of less than $125,000, or households earning less than $250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for an additional $10,000 in relief.
Almost 26 million people already have applied for the relief, with 16 million approved, but the Education Department stopped accepting and processing applications last week after the plan was ruled illegal.
For typical borrowers, monthly payments would be $200 to $300 higher than they would be if Biden’s plan goes through, the Education Department said. The strain could lead to soaring default rates, and push the country into an even deeper recession.
“We anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic,” Education Undersecretary James Kvaal said in a Tuesday filing. “This could result in one of the harms that the one-time student loan debt relief program was intended to avoid.”
In other words, the president is hoping that his unconstitutional scheme in which taxpaying citizens fund the liberal education of deadbeats so the US recession isn’t even deeper than it currently is, is overturned by a conservative dominated supreme court. GLWT.
Thu, 11/17/2022 – 22:40