It’s not over yet, that’s true on the court and in sports. The Biden Administration began confiscating student loans this week after a judge on Thursday blocked a legal challenge by several states. But the Eighth Circuit Court of Appeals issued a ruling late Friday as it considered the states’ appeal.
The half-trillion dollar question before the Eighth Circuit is whether the states have demonstrated a concrete and substantial injury that gives them standing to sue. Federal judge Henry Edward Autrey, a George W. Bush appointee, disagreed, but the states’ arguments deserve more weight than his 19-page opinion.
Missouri contends that the amnesty will result in lost revenue for its student-finance provider, the Missouri State Higher Education Award Authority (MoHELA). State lawmakers established Mohela in 1981 to provide financial aid to Missouri students. Federal law defines Mohela as a “public utility” that performs “a public service.”
But Judge Autrey said Missouri does not have standing because “the legislature intended to create a viable and profitable industry.” If Mohela pays for Biden’s loan, the judge wrote, the state of Missouri will not be in trouble.
That is controversial. Legislators often set up public agencies that are independent but accountable to the government and enjoy tax support. Public pension funds and the US Postal Service are examples.
In some cases federal courts also provide statutory authority to enforce their jurisdiction. See the federal challenge to Trump’s repeal of the Deferred Action for Childhood Arrivals program. Missouri argues that if Mohela loses revenue, its students will receive less financial aid. The judge rejected this proprietary interest.
Nebraska and Arkansas separately argued that they would be harmed because their state agencies are invested in Federal Family Education Loans (FFEL) funds. The Administration submitted that only Personal Income should be forgiven. Governments say this has encouraged FFEL borrowers to consolidate into Equity Funds and pay off government revenues.
But on Sept. 29, the same day the GOP administration sued, the Administration tried to argue the case by removing future consolidated FFEL loans from foreclosure. Judge Autrey plays the Administration. “The lack of continued pressure to consolidate will defeat the claims of Arkansas and Nebraska,” he suggested.
It’s not fast. The Supreme Court has frowned upon federal prosecutors trying to prosecute the cases. This is what the Biden Administration has tried West Virginia v. EPA when he proposed renewing Obama’s Clean Power Plan. Ergo, it argued, West Virginia and the other plaintiffs did not have standing.
The eyes of the Supreme Court changed. “‘There is no termination of intent to prosecute a case’ unless it is clear that the alleged wrongful conduct cannot be expected to be repeated,'” the Court wrote, citing a example, saying that the Biden Administration “‘has no indication that if this lawsuit is resolved in its favor it will inevitably'” renew such laws.
The same goes for President Biden’s loan forgiveness. The Department of Education’s September 29 announcement also said it is “assessing whether there are other ways to help” borrowers with FFEL loans. If the government’s lawsuit is successful, Mr. Biden FFEL funds later.
The standard for injunctive relief is that plaintiffs must show that they will suffer irreparable harm and succeed on the merits. Judge Autrey didn’t comment either, but GOP governments are the strong case for both. It cannot be argued that Congress did not give the President the authority to cancel hundreds of billions of dollars in student loans.
Mr. Biden on Friday claimed victory, falsely claiming that Judge Autrey and the Supreme Court said “‘We’re with Biden. The Brown County Taxpayers Association of Wisconsin.
Judge Barrett did not elaborate on his opinion, but general burdens on taxpayers do not constitute serious or concrete injury. It is disturbing, to say the least, says Mr. Biden has Republican-appointed judges on his side. In the past he has criticized the Supreme Court as a “support group.” But he shouldn’t claim victory too soon because the Eighth Circuit still has jurisdiction.
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