WASHINGTON – The Supreme Court on Thursday delayed a decision on whether to grant President Joe Biden’s offer to implement his student loan forgiveness plan, announcing instead that it will hear full oral arguments on an expedited basis.
In a brief order, the court said it would hear arguments in February and a decision would be made soon. Meanwhile, the plan remains locked.
Attorney General Elizabeth Prelogar filed an emergency petition Nov. 18 on behalf of the Biden administration asking judges to lift an injunction imposed by the St. Louis-based court. US Court of Appeals for the 8th Circuit. In a separate case, a federal judge in Texas also blocked the plan. The US Court of Appeals for the Fifth Circuit on Wednesday refused to lift that hold, meaning the administration could soon appeal that case to the Supreme Court as well.
Prelogar said the Eighth Circuit’s decision “leaves millions of economically vulnerable borrowers in limbo, unsure about the size of their debt and unable to make financial decisions with an accurate understanding of their future payment obligations.”
Various individuals and groups have challenged the proposal, and the case is now in the Supreme Court involving claims brought by six states: Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina. The states’ lawsuit is supported by 17 other states.
A federal judge ruled that the states had no standing to pursue the lawsuit, but the appeals court disagreed, focusing on a Missouri agency that administers federal student loans. The state argues that the agency would lose revenue if the loans are forgiven.
In court documents, attorneys for the states said the administration was using the Covid pandemic as “a pretext to mask the president’s true goal of fulfilling his campaign promise to erase student loan debt.”
A major hurdle facing those who challenge the program is that they have had to demonstrate legal capacity to sue by illustrating how the program harms them. Even if the Supreme Court were to conclude that the states had standing and then turn to the legal question of whether Biden had the authority to forgive the loans, the administration would likely face an uphill battle with the court’s skeptical conservative majority. of the sweeping claims of federal power. . The court in January, for example, blocked Biden’s Covid vaccine or the testing requirement for larger companies.
The program, which allows eligible borrowers to cancel up to $20,000 in debt, has been on hold since the 8th Circuit issued a temporary stay in October. Since then, the administration has closed the application process.
Under a different Covid-related presidential order, borrowers currently do not have to make payments. On November 22, the administration extended that payment pause until the end of June or until the litigation is resolved, whichever comes first; payments would restart at the end of August if there is no resolution by the end of June.
The challengers argued that the administration’s plan, announced by Biden in August and originally scheduled to take effect this fall, violates the Constitution and federal law, in part because it circumvents Congress, which they said has the power to create laws related to student loan forgiveness.
Biden’s program would provide up to $10,000 in debt cancellation for borrowers making less than $125,000 a year (or couples filing jointly and making less than $250,000 a year). Pell Grant recipients, who make up the majority of borrowers, would be eligible for an additional $10,000 in debt relief. The overall program is anticipated to help more than 40 million borrowers, the administration said.
The nonpartisan Congressional Budget Office estimated in September that Biden’s plan would cost $400 billion, while the Education Department said the price would be closer to $379 billion.