The plan will remain on hold as the court deferred action at the request of the administration to return it.
Nebraska Attorney General Doug Peterson (right), one of the officials who sued the administration, welcomed the High Court’s decision to take up the case.
“The president’s attempt to cancel student loans for most borrowers goes far beyond his legal authority. And it wrongly shifts the economic burden of more than $430 billion in loans from those who benefited from this money to those who did not,” he said in a statement. “We stand firm against the president’s political exploitation of our student loan program just before an election.”
The Biden administration also said it welcomes the court’s decision to hear the case.
“This program is needed to help more than 40 million eligible Americans struggling with student debt recover from the pandemic and move forward with their lives,” said the White House press secretary, Karine Jean-Pierre, in a press release. “The program is also legal, backed by careful analysis by administration lawyers.”
The Biden plan would be forgive up to $20,000 in federal student loans debt for over 40 million borrowers. The United States 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 ongoing litigation.
In a separate case, a Texas federal judge on November 10 declared the forgiveness plan illicit. The United States Court of Appeals for the 5th Circuit on Wednesday refused a request by the Department of Justice to suspend that decision while the court considers the merits of the administration’s appeal.
Legal battles have left millions of student borrowers in limbo. More than half of those eligible had applied for the pardon scheme before it was halted by the courts, with the Department for Education approving some 16 million applications. Despite the suspension of the program, the ministry recently informed people that their applications had been approved, assuring them that the administration would pay off the debt if it won in court.
The loan relief plan would cancel up to $10,000 in federal student debt for borrowers earning up to $125,000 a year, or up to $250,000 for married couples. Those who received Pell Grants are eligible for an additional rebate of $10,000.
The issue comes before a court skeptical of the administration’s power to impose pandemic-related relief without express congressional approval.
In 2021, the court revoked a national moratorium on evictions imposed by the Centers for Disease Control and Prevention that began under the Trump administration and was extended by Biden. In January of this year, he discontinued the administration’s vaccination or testing requirement for the nation’s largest employers, saying such a command was beyond the authority of the Occupational Safety and Health Administration.
Republican attorneys general in Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina said it was another case of overreach.
“As President Biden publicly declares the end of the pandemic, the Secretary and the Department of Education are using COVID-19 to justify massive debt cancellation – an illegal attempt to erase over $400 billion of $1.6 trillion in federal student loan debt and eliminate any remaining loan balances for approximately 20 million out of 43 million borrowers,” the states said in their Supreme Court filing.
Solicitor General Elizabeth B. Prelogar said states do not have the legal standing to challenge the administration’s actions and that federal law gives the secretary of education broad authority to make changes to the curriculum. student loans. Both the Trump and Biden administrations have invoked the law to suspend loan repayments during the pandemic.
“Congress has authorized the Secretary of Education to respond to national emergencies by providing assistance to affected student borrowers,” Prelogar wrote in a court filing. “Without finding that the Secretary exceeded this express statutory authority, the Eighth Circuit issued a nationwide injunction restraining the Secretary from providing critical assistance to millions of Americans suffering from the lingering economic effects of a global pandemic.”
The Biden administration on November 23 extended student loan repayment break in the new year. “It’s not fair to ask tens of millions of borrowers eligible for relief to resume paying off their student debt while the courts consider the lawsuit,” Biden said.
Payments must now resume 60 days after the Ministry of Education is allowed to implement the program or the dispute is resolved. If this has not happened by June 30, payments will resume 60 days later or September 1, depending on the department.
The Biden administration initially encouraged borrowers to apply for debt relief by November 15, when the moratorium was due to end on December 31, in hopes that their applications would be processed before the pause was lifted. This 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 accrued interest on their debt since Congress passed the Pandemic Relief Care Act in March 2020. The Trump administration extended the break twice, while Biden did it six times.
Unions, civil rights groups and student debt activists had pressured Biden to refrain from collecting loan repayments as the debt relief program is in legal limbo . Many of those same groups have filed briefs urging the Supreme Court to reinstate the program.
“The Biden administration’s student debt relief plan is a lifeline for millions of educators, nurses, public employees and other workers – people who have carried us through the pandemic and that keep our economy running every day,” said Randi Weingarten, president of the American Federation of Teachers, who filed a brief in support of the plan. “But obstructionist ideologues play politics with their future and abuse the legal system, just to stop progress and worse to deny President Biden an achievement that would help millions.”
The case is Biden v. Nebraska.