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Thursday, February 2, 2023

Biden’s Plan to Eliminate Student Loans is Temporarily Halted

Joe Biden announced on Friday that nearly 22 million people had applied for the loan relief program

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UNITED STATES: A federal appeals court has temporarily suspended Joe Biden’s plan to cancel billions of dollars worth of federal student loans while it reviews a plea by six Republican-led states to thwart the initiative.

The Biden administration is not allowed to make any decisions about the program while the eighth circuit court of appeals is reviewing the temporary stay, which was imposed on Friday.

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At Delaware State University, a historically Black institution where the majority of students get federal Pell Grants, President Biden announced on Friday that nearly 22 million people had applied for the loan relief program in the week since his administration made the online application available.

According to the August-announced proposal, borrowers with incomes under $125,000 or households making under $250,000 per year would have their $10,000 in student loan debt forgiven. The additional $10,000 in debt forgiveness will be provided to Pell Grant winners, who often exhibit greater financial need.

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According to the administration, the proposal allows for partial debt forgiveness for 43 million borrowers, with the possibility of full debt forgiveness for 20 million.

The scheme will cost nearly $400 billion over the following three decades, according to the Congressional Budget Office. The administration is going beyond its legal authority in a way that would cost states millions of dollars, US district judge Henry Autrey was informed by Nebraska attorney general’s office attorney James Campbell at a hearing on October 12.

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Conservative lawyers, Republican legislators, and business-oriented organizations have argued that Biden exceeded his authority by taking such broad action without receiving congressional approval. They referred to it as an unfair government handout for comparatively well-off individuals at the expense of taxpaying citizens who chose not to seek higher education.

Many Democratic politicians who are up for re-election in difficult races have disavowed the scheme. At the hearing on October 12, justice department lawyer Brian Netter informed Autrey that the effects of the Covid-19 outbreak are still being felt. In the last 2.5 years, he claimed, there has been a dramatic increase in student loan defaults.

The program has also been the target of other litigation. Amy Coney Barrett, a justice on the Supreme Court, dismissed an appeal from a Wisconsin taxpayers’ group on Thursday that sought to halt the debt cancellation program.

Also Read: Biden Criticizes Truss’s Economic Strategy, Shows Concern over the Dollar’s Strength

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