The Biden administration's student loan bailout program suffered another legal blow after a federal appeals court denied the administration’s request to reinstate it.
Certain borrowers would have had $10,000 in federal student loans "forgiven," while Pell grant recipients would see up to $20,000 in relief.
The New Orleans-based 5th U.S. Circuit Court of Appeals rejected the administration’s request to put a hold on an order from a lower district court in Texas vacating the program.
U.S. District Judge Mark Pittman of Texas said in a Nov. 10 ruling that the student loan bailout program is “unlawful” and is a "complete usurpation of congressional authorization implicating the separation of powers required by the Constitution.”
The 5th Circuit’s decision upholds that order while the administration appeals Pittman’s ruling.
The decision is almost certain to be appealed to the Supreme Court, which is already considering a ruling from the St. Louis-based U.S. Court of Appeals for the 8th Circuit that blocked implementation of the loan forgiveness program. In its request to the 5th Circuit this month, the Biden administration had already indicated it would likely "seek relief from the Supreme Court in this case if this court declines to stay the district court’s judgment."
The high court may decide to combine the two cases. (USA Today)
According to previous estimates from the Congressional Budget Office, the student loan bailout would cost taxpayers roughly $400 billion.
As the program makes its way through courts, the Biden administration announced recently it is extending a pause on student loan payments through June 30, 2023 - a move criticized by GOP lawmakers.
UPDATE: The Administration is extending the pause on federal student loan repayments to allow for the Supreme Court to rule in the case on the student debt relief program.
— The White House (@WhiteHouse) November 22, 2022
The pause will end no later than June 30, 2023. Payments will resume 60 days after the pause ends. pic.twitter.com/xTtlqWY3g0
I'm confident that our student debt relief plan is legal. But it’s on hold because Republican officials want to block it.
— President Biden (@POTUS) November 22, 2022
That's why @SecCardona is extending the payment pause to no later than June 30, 2023, giving the Supreme Court time to hear the case in its current term. pic.twitter.com/873CurlHFZ
Biden's perpetual "pause" of student loan payments puts taxpayers on the hook for billions.
— Tom Cotton (@TomCottonAR) November 23, 2022
And those who didn't go to college will be hardest hit.