The plan remains on hold as the court deferred action at the administration’s request to reinstate it.
Nebraska Attorney General Doug Peterson (R), one of the officials suing the administration, praised the Supreme Court’s decision to hear the case.
“The president’s attempt to freeze student loans for most borrowers goes far beyond his legal authority. And it falsely shifts the economic burden of more than $430 billion in loans from those who benefited from that money to those who did not,” he said in a statement. “We stand firm in front of the president’s political exploitation of our student loan program right before the election.”
The Biden administration also said it welcomed the court’s decision to hear the case.
“This program is needed to help more than 40 million eligible Americans struggling with the burden of student debt recover from the pandemic and get on with their lives,” White House Press Secretary Karine Jean-Pierre said. , in a statement. “The program is also legal, backed by careful analysis from administrative lawyers.”
The Biden plan would forgive up to $20,000 in federal student loan debt for more than 40 million borrowers. The U.S. Court of Appeals for the 8th Circuit had granted a request by a coalition of six Republican-led states to impose a nationwide injunction on the plan amid pending litigation.
In a separate case, a Texas federal judge ruled on Nov. 10 the forgiveness plan unlawful. The U.S. Court of Appeals for the 5th Circuit on Wednesday denied a request from the Justice Department to stay that ruling while the court reviews the merits of the government’s appeal.
Another appeals court rejects the bid to revive Biden’s student loan exemption
The legal battle has left millions of student loan borrowers in limbo. More than half of eligible people had applied for the forgiveness program before it was shut down by the court, with the Department of Education approving some 16 million applications. Despite the shutdown of the program, the department recently informed people that their applications have been approved, assuring them that the administration will forgive the debt if it wins in court.
The loan relief plan would forgive up to $10,000 in federal student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Those who received Pell Grants are eligible for an additional $10,000 in forgiveness.
The matter comes before a court that is skeptical of the government’s authority to mandate pandemic relief without explicit approval from Congress.
In 2021, the court repealed a national moratorium on evictions imposed by the Centers for Disease Control and Prevention that had begun during the Trump administration and was extended by Biden. In January this year, it halted the government’s vaccination or testing requirement for the country’s largest employers because such an order exceeded the authority of the Occupational Safety and Health Administration.
Republican attorneys general of Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina said this was another case of overreach.
“As President Biden publicly declares the pandemic is over, the Secretary of State and the Department of Education are using COVID-19 to justify the cancellation of massive debt – an illegitimate attempt to take more than $400 billion of the $1.6 trillion in federal erase student loan debt and eliminate any remaining debt. loan balances for about 20 million of 43 million borrowers,” the states said in their filing with the Supreme Court.
Attorney General Elizabeth B. Prelogar said the states did not have the legal authority to challenge the administration’s actions, and that federal law gives the secretary of education broad authority to make changes to the student loan program. The Trump and Biden administrations both invoked the law to suspend loan repayments during the pandemic.
“Congress authorized the Secretary of Education to respond to national emergencies by providing assistance to affected student loan borrowers,” Prelogar wrote in a petition to the court. “Without finding that the Secretary exceeded that express legal authority, the Eighth Circuit issued a nationwide injunction preventing the Secretary from delivering critical assistance to millions of Americans suffering from the ongoing economic fallout from a global pandemic.”
On November 23, the Biden administration extended the student loan repayment pause into the new year. “It is not fair to ask tens of millions of debt-eligible borrowers to resume their student loan debt while the courts are considering the lawsuit,” Biden said.
Payments will now resume 60 days after the education department is authorized to run the program or the process is resolved. If not done by June 30, payments will resume 60 days later or on September 1, the department said.
The Biden administration had initially encouraged borrowers to apply for debt relief before November 15, when the moratorium was due to end on December 31, in the hope that their applications would be processed before the pause was lifted. That could have given the Department of Education enough time to recalculate borrowers’ monthly payments based on their new balances.
The vast majority of federal student loan borrowers have been spared monthly payments and interest on their debt since Congress passed the Pandemic Cares Act in March 2020. The Trump administration extended the pause twice, while Biden did so six times.
Unions, civil rights groups and student debt activists had pressured Biden to refrain from collecting loan payments while the debt relief program is in legal limbo. Many of those same groups have filed summary judgments urging the Supreme Court to reinstate the program.
“The Biden administration’s debt relief plan is a lifeline for millions of educators, nurses, civil servants and other working people — people who have helped us through the pandemic and keep our economy running every day,” said Randi Weingarten, president of the American Federation of Teachers, which has submitted a letter in support of the plan. “But obstructive ideologues play politics with their futures and abuse the justice system simply to halt progress and, even worse, to deny President Biden an achievement that would help millions.”
The case is Biden against Nebraska.