Biden's student loan forgiveness plan can take effect after judge lets restraining order expire - eviltoast
The judge wrote that he would transfer the case to U.S. District Court for the Eastern District of Missouri.
  • NocturnalMorning@lemmy.world
    371·
    1 month ago

    The headline seems a bit misleading. They’re just moving the lawsuit to another venue. States are arguing that forgiving student loans will affect taxes which is bologna because student loans have nothing to do with taxes.

    • Kadaj21@lemmy.worldEnglish
      11·
      1 month ago

      I mean, freeing up money from the payments I could see having the effect if allowing states to bring in more from sales taxes for stuff that folks could then afford to buy, or property taxes maybe for better housing.

    • BertramDitore@lemm.eeEnglish
      6·
      1 month ago

      It’s completely misleading, to me. As someone with a laughably high student loan balance, my livelihood depends on the outcome of these disingenuous court cases. When I saw this headline, my heart skipped a beat with excitement. But nope, this will only be resolved when there is a final judicial ruling (probably from the Supreme Court, eventually), and this was not that.

      • abff08f4813c@j4vcdedmiokf56h3ho4t62mlku.srv.us
        1·
        1 month ago

        Actually, it’s not about taxes per se, but state revenue,

        The states argued that implementation of mass student loan forgiveness would harm state finances, in part because state-related servicers (such as Missouri-based MOHELA) would lose revenues, and those lost revenues would in turn impact state treasuries. Missouri and other states made similar arguments in the legal challenge to Biden’s first debt relief plan.

        Forgiven loans and cancelled loans do indeed cause lost revenue for servicers (since the servicing ends early), so unfortunately this is a legitimate argument. And this this is a state owned company, the lost revenue would have gone into state coffers, so…

        It’s also a bit bunk as folks winning the lottery and paying off their loans in full early - which they are fully entitled to do - causes the same lost revenue scenario. It’s also easy to see a technical fix here (Congress passes an updated law giving Biden and the Department of Ed. to pay back the servicers the potential lost fees and such on each forgiven balance, and then the argument goes away. Instead of backing this, though, they want to punish the student borrowers instead.)

        Source: https://www.forbes.com/sites/adamminsky/2024/10/03/judge-transfers-student-loan-forgiveness-lawsuit-in-surprise-win-for-30-million-borrowers/
        Archive: https://archive.is/fyp6U

    • Telodzrum@lemmy.world
      6·
      1 month ago

      It’s both. The case is being transferred and the program can go into effect (unless the new venue issues a TRO).

      • BertramDitore@lemm.eeEnglish
        51·
        1 month ago

        What’s the process for if the new venue doesn’t issue a stay, but the final outcome is that they strike down the relief? (I’m really asking.) My payments start back up, and then a month later they double or triple based on the outcome of the case? I just assumed the new venue would stay the relief from going into effect before making a ruling, but you’ve made me nervous.

        • Telodzrum@lemmy.world
          2·
          1 month ago

          You’ve actually stated one of the main reasons that TROs are issued. One of the required showings by the petitioning party is to demonstrate “imminent” and “irreparable harm.” In this case the imminent is shown by the plan’s policies and planned implementation as well as the fact that there was a date promulgated for commencement. Irreparable harm would be demonstrated by something similar to your scenario – the petitioner would argue that if it goes into effect and the final determination is that it should not have been permitted to go into effect, that monies which should have been rightfully collected are forever lost, absent an otherwise unnecessary affirmative and costly process of collecting on the marginal difference of payments owed.

          To more directly answer your question, the court would direct the companies to collect in a manner which is least onerous to both parties (debtor and creditor); likely a long period of increased collections or (IMHO, more likely) extending the payment period to collect the now-again additional amount due.

          I agree with you though, I think given the circumstances and gravity to individual debtors in this case the prudent thing is to stay implementation of the program.