Supreme Court to Decide Fate of Student Debt Relief

Justices keep pause on Biden's debt-canceling plan in place now
By Newser Editors and Wire Services
Posted Dec 1, 2022 2:56 PM CST
Biden's Student Loan Relief Heads to Supreme Court
President Biden answers questions with Education Secretary Miguel Cardona as they leave an October event about the student debt relief portal beta test in the White House complex.   (AP Photo/Susan Walsh, File)

The Supreme Court on Thursday said the Biden administration program to cancel student loans will remain blocked for now, but the justices agreed to take up the case in late winter. The court's decision to hear arguments relatively quickly means it is likely to determine whether the widespread loan cancellations are legal by late June. That's about two months before the newly extended pause on loan repayments is to expire. The administration wanted a court order that would have allowed the program to take effect even as court challenges proceed, the AP reports. But as a fallback, it suggested the justices hold arguments and decide the issue.

Biden's plan promises $10,000 in federal student debt forgiveness to those with incomes below $125,000, or whose households earn less than $250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for an additional $10,000 in relief. The Congressional Budget Office has said the program will cost about $400 billion over the next three decades. More than 26 million people already applied for the relief, with 16 million approved, but the Education Department stopped processing applications last month after a federal judge in Texas struck down the plan.

The Texas case is one of two in which federal judges have prohibited the administration from implementing the loan cancellations. In a separate lawsuit filed by six states, a three-judge panel of the 8th US Circuit Court of Appeals in St. Louis also put the plan on hold, and that case is before the Supreme Court. Conservative attorneys, Republican lawmakers, and business-oriented groups have asserted that Biden overstepped his authority in taking such sweeping action without the assent of Congress. They called it an unfair government giveaway for relatively affluent people at the expense of taxpayers who didn’t pursue higher education.

The administration has argued that the loan cancellations are legal under a 2003 law aimed at providing help to members of the military. The program is a response to “a devastating pandemic with student loan relief designed to protect vulnerable borrowers from delinquency and default,” the Justice Department said in court papers. The law, the HEROES Act, allows the secretary of education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs ... as the Secretary deems necessary in connection with a war or other military operation or national emergency.” (Read more student debt stories.)

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