Judges Ralph Erickson and L. Steven Grasz, both nominated by Donald Trump to the Eighth Circuit Court of Appeals, joined by Bush nominee Raymond Gruender, issued an order that blocked a Biden Administration student loan relief plan that could “cancel billions in student loans” from taking effect in seven states. The order remains in effect until the Republican-led lawsuit is over. The August 2024 decision is in Missouri v Biden.
What is the background of this case?
After the Supreme Court struck down a Biden Administration student loan relief plan in 2023, thanks to three votes from Trump justices in a 6-3 decision, the Administration promulgated an alternative plan. The SAVE plan would “forgive approximately $475 billion in federal student loan debt.”
Opponents promptly challenged the plan, including one lawsuit filed by seven Republican states led by Missouri. The district court in the case granted a partial preliminary injunction against the plan, stopping the provision concerning the “ultimate forgiveness of loans.” The Department of Education devised a method that allowed it to forgive loans as the litigation proceeds. Both sides appealed, with the states arguing that the injunction does not go far enough to stop the program.
How did Judges Erickson and Grasz and the Eighth Circuit Rule and Why is it Important?
Judges Erickson and Grasz, joined by Judge Gruender in an unsigned opinion, sided with the Republican states. It issued an opinion and order that completely stops the Education Department from forgiving student loan debt under the SAVE program while the litigation continues.
The court ruled that the states had shown “at least a ‘fair chance’ that they will prevail” in the case, as well as irreparable injury. The government’s interpretation of the Higher Education Act to authorize the program, the opinion continued, appeared invalid in light of the Supreme Court’s earlier decision.
Litigation continues around the country concerning the revised student loan forgiveness plan, with differing results. For example, the Tenth Circuit recently reversed a preliminary injunction against the SAVE plan pending appeal. The issue will likely reach the Supreme Court, where Trump justices again may well play a decisive role. In the meantime, Trump judges Erickson and Grasz have seriously harmed the Administration’s student loan forgiveness plan, demonstrating once more the importance of who will choose our federal judges after this year’s election.
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