The Supreme Court is pausing student debt relief after being blocked by a Texas judge
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The Supreme Court on Thursday delayed its decision on President Joe Biden’s student loan forgiveness plan, blocking it until judges hear the case early next year.
The delay is the latest in an uphill battle over student loan forgiveness, a program that would have relieved more than 40 million borrowers thousands of dollars.
Last month, a federal judge in North Texas ruled that the forgiveness program was “unlawful” because Biden failed to follow federal procedures to allow for public comment before announcing the policy.
In the order, the court said it would hear the full arguments in February. Data from the Federal Student Aid Bureau shows that Texas has 3.3 million residents with a total of $110.7 billion in student loan debt. Texas has the second-highest number of borrowers and debts after California, where students owe $133.5 billion.
Biden announced the plan in August. Individuals earning over $125,000 per year are not eligible for the Forgiveness Program and applicants are limited to $10,000. However, recipients of Pell Grants intended for low-income students are eligible for up to $20,000 in relief. Texas has more than 2.3 million Pell Grant recipients.
Borrowers could apply for the program in October. The program was immediately faced with several lawsuits, including one brought by leaders from six GOP-run states and one brought by the Job Creators Network Foundation in a North Texas court on behalf of two borrowers who are themselves not qualify for all program benefits.
These borrowers disagreed with the program’s eligibility criteria, and the lawsuit alleged that they could not voice their disagreement. The 8th US Circuit Court of Appeals then temporarily suspended the program that same month.
By then, more than 16 million people had already been admitted for relief by the US Department of Education. In November, the agency emailed approved applicants updates stating, “A number of lawsuits have been filed against the program, which are currently preventing us from paying off your debt.”
According to the Texas Higher Education Coordinating Board, as of 2021, 56% of students graduating from a four-year public university had about $25,000 in student loan debt.
Biden extended the student debt payment pause that was scheduled to expire Jan. 1, but if the plan is not implemented or the lawsuit is not resolved, payments will resume after June 30. The court lays down arguments for late February or early March.
