A panel of federal judges have put President Biden’s student debt dream on hold, and this comes as a result of MOHELA, a formidable Missouri agency allied with six-Republican based states that have charged Biden with overreaching the White House authority. What is MOHELA?
Simply put, it’s the state of Missouri’s Higher Education Loan Authority, and one of the largest holders and servicers of student loans, based in St. Louis.
Central to its mission, since 2021 it has provided student loans to nearly 3 million recipients and counting, is to remove “barriers for students so they can access higher education.” It is, according to its website, not a government agency but is closely tied to Missouri’s financial operations and obligations. Back in July MOHELA was given the responsibility of determining a waiver on student loans of a certain amount, and that waiver expired in October.
When Biden announced that he would take steps to eliminate up to $10,000 of public student loan debt for millions of borrowers, including up to $20,000 who received Pell Grants, Republicans who opposed the plan took action to challenge it in court.
Biden’s plan was deemed fiscally unwise, and lawsuits poured in from several states, arguing that debt forgiveness needed to be blocked because it harmed the “states’ financial and proprietary interests.” These states used MOHELA as evidence that if the loans were forgiven it would hurt the agency, then it would also hurt the state.
At first a federal judge in St. Louis refused to buy the argument and dismissed the case, who was appointed by George W. Bush. The case was appealed in the Eighth Circuit Court of Appeals to get another ruling. The three-panel judge, consisting of one Bush appointed and two by Trump, ruled with the states and blocked the program. As we go to press, MOHELA has abstained from the ruling on the program.
Everything at the moment is put on hold, and it’s to be seen if the White House extends the freeze on the payments, which would have been over if Biden’s plan had gone through.
It would appear to be a hearing in the Supreme Court is inevitable, though that may never happen and an earlier denial on the issue was rendered by Justice Amy Coney Barrett, another Trump appointee.