November 28, 2022

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Biden asks Supreme Court to intervene on student loan forgiveness plan

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  • Biden’s student loan forgiveness program is being challenged by several entities.
  • The latest emergency challenge from conservative states could be decided by the Supreme Court within days.
  • Separately, the program is also on hold because of a ruling by a Texas federal trial court.

WASHINGTON – President Joe Biden’s administration filed an emergency appeal at the Supreme Court on Friday, asking the justices to intervene in a months-long legal dispute over a $400 billion student loan forgiveness program that has been put on hold by two federal courts. 

The administration filed its request days after the St. Louis-based U.S. Court of Appeals for the 8th Circuit sided with a group of conservative states that have argued Department of Education officials exceeded their authority with the program. A U.S. District judge in Texas has also halted the program in a separate lawsuit.

“The Eighth Circuit’s erroneous injunction leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations,” U.S. Solicitor General Elizabeth Prelogar, who represents the federal government at the Supreme Court, said in the appeal.

The six states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina –  argue the administration lacks the authority to forgive student loan debt. The states asserted they would be financially harmed by cancelling billions in student loan debt. 

The litigation has stalled a program that would impact millions of Americans. Biden’s plan would cancel up to $20,000 in student loan debt for Pell Grant recipients and $10,000 for other borrowers, for people earning up to $125,000 a year or part of a household where total earnings are no more than $250,000. 

A federal judge in Missouri dismissed the states’ request to block the program  last month, saying they lacked standing to sue. While their suit presented “important and significant challenges to the debt relief plan,” the trial court ruled, “the current plaintiffs are unable to proceed.” The states appealed to the 8th Circuit, which granted a request to temporarily block the program while the litigation continues. 

It’s the third time that the program has come before the Supreme Court. Associate Justice Amy Coney Barrett denied a similar request from a Wisconsin taxpayer group Oct. 20. Barrett denied the request to block the program without explanation, as is often the case on the court’s emergency docket. 

Barrett denied a second challenge to the program on Nov. 4.  A conservative legal group had filed an emergency appeal in that case on behalf of two people entitled to “automatic” cancellation of their debt. The plaintiffs had claimed that the automatic cancellation of their debt would create “excess tax liability under state law.”

One reason why there are so many different lawsuits over the program is that groups opposed to the program are attempting to find a plaintiff who has standing – in other words, who can demonstrate they are injured by the effort in a way that allows them to challenge it in federal court. 

Even if the Supreme Court rejects an emergency appeal about the program for a third time, the administration will not be able to start forgiving student debt because of the separate decision in the Texas case. The administration on Thursday asked the U.S. Court of Appeals for the 5th Circuit to temporarily block that ruling.   

Biden enacted the debt relief plan under the HEROES Act, which was passed after 9/11 sparked an American-led military campaign against terrorism. The act gave the administration authority to forgive student loan debt in association with military operations or national emergencies.

The administration asserted that the law allows loan forgiveness for Americans dealing with financial hardship because of the COVID-19 pandemic.  

Contributing: Joey Garrison

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