A judge will decide whether the student loan process will be put on hold – Action News Jax
A U.S. district judge will hear arguments on Wednesday that could suspend the student loan forgiveness program.
>> Read more trending news
A lawsuit filed by attorneys general in six states asks the court to suspend the program because it says the Biden administration lacked the legal authority to write off student loan debts.
The six states – Missouri, Arkansas, Kansas, Nebraska, South Carolina and Iowa – filed suit in federal court in Missouri in September. District Judge Henry Autrey will hear the case.
According to court documents, the Biden administration says the power to cancel loans stems from the HEROES Act passed in 2003 in the wake of the September 11, 2001, terrorist attacks.
This act grants the Secretary of Education the power to “reduce hardship” that federal student loan borrowers are experiencing due to a national emergency, such as the pandemic. The Biden administration released a memo from the Justice Department’s office of legal counsel saying the HEROS Act covers the move.
Lawyers for the states filing the suit say the HEROES Act does not give the Biden administration the power to cancel debt since that authority only steps in during a national emergency.
Additionally, attorneys in the six states say the program would reduce revenue for companies that service federally-backed student loans. The suit names a Missouri-based loan officer named MOHELA.
The suit is one of many filed within the last two weeks that target the program that forgives $10,000 of student loan debt for those earning less than $125,000 a year or households earning less than $250,000.
Pell Grant recipients will be eligible for additional debt forgiveness of $10,000.
©2022 Cox Media Group