The plan is on hold as the court postponed action on the administration’s request for restoration.
Nebraska Attorney General Doug Peterson (R), one of the officers suing the administration, commended the Supreme Court’s decision to admit the case.
“The President’s attempt to foreclose on student loans for most borrowers goes far beyond his legitimate authority. And it falsely shifts the economic burden of over $430 billion in credit from those who benefited from that money to those who didn’t,” he said in a statement. “We are firmly opposed to the political instrumentalization of our student loan program by the President shortly before an election.”
The Biden administration also said it welcomed the court’s decision to hear the case.
“This program is necessary to help over 40 million eligible Americans burdened with student loan debt recover from the pandemic and move forward in life,” White House Press Secretary Karine Jean-Pierre said in a statement . “The program is also legal, backed by careful analysis by administrative attorneys.”
The Biden plan would forgive up to $20,000 in federal student loan debt for more than 40 million borrowers. The U.S. Circuit Court of Appeals for the 8th Circuit had granted a motion by a coalition of six Republican-led states to place a statewide injunction against the plan amid an ongoing legal battle.
In another case, a federal judge in Texas declared Nov. 10 the forgiveness plan unlawful. The U.S. Circuit Court of Appeals for the 5th Circuit on Wednesday denied a Justice Department request to set aside that ruling while the court reviews the merits of the government’s appeal.
Another appeals court rejects bid to revive Biden student-loan relief
The litigation has left millions of student loan borrowers in limbo. More than half of those eligible had applied for the forgiveness program before the courts stopped it, with the Department of Education approving about 16 million applications. Despite the program’s suspension, the department recently informed people that their applications had been approved and assured them that if they prevail in court, the administration will pay off the debt.
The loan relief plan would eliminate up to $10,000 in state student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Those who have received Pell Grants are eligible for an additional $10,000 in forgiveness.
The matter comes before a court skeptical of the government’s power to impose pandemic-related relief without explicit approval from Congress.
In 2021, the court lifted a national moratorium on evictions imposed by the Centers for Disease Control and Prevention that began during the Trump administration and was extended by Biden. In January this year, it halted government vaccination or testing requirements for the country’s largest employers, saying such a command would exceed the powers of the Occupational Safety and Health Agency.
The Republican attorneys general for Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina said it was another case of hyperbole.
“As President Biden publicly declares the pandemic over, the Secretary and Department of Education are using COVID-19 to justify mass debt forgiveness — an illegal attempt to erase over $400 billion of the $1.6 trillion in federal student-loan debt and all that remains to eliminate loan balances for approximately 20 million out of 43 million borrowers,” the states said in their Supreme Court filing.
Attorney General Elizabeth B. Prelogar said states do not have the legal authority to challenge the administration’s actions and federal law gives the Secretary of Education broad powers to make changes to the student loan program. The Trump and Biden administrations both invoked the pandemic loan repayment suspension bill.
“Congress authorized the Secretary of Education to respond to national emergencies by relieving affected borrowers of student loans,” Prelogar wrote in a filing to the court. “Without finding that the Secretary of State exceeded that express statutory authority, the Eighth Circuit Court issued a statewide injunction preventing the Secretary of State from providing critical assistance to millions of Americans suffering the ongoing economic effects of a global pandemic.”
The Biden administration on Nov. 23 extended the student loan repayment pause into the new year. “It’s not fair to require tens of millions of borrowers who are eligible for relief to resume their student debt payments while the courts review the lawsuit,” Biden said.
Payments are now scheduled to resume 60 days after the Department of Education is allowed to implement the program or the litigation is settled. If it hasn’t done so by June 30, payments will resume 60 days later or on September 1, according to the department.
The Biden administration had initially encouraged borrowers to apply for debt relief by Nov. 15, when the moratorium was due to end on Dec. 31, in the hope that their requests 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 accruing on their debt since Congress passed the Pandemic Assistance Nursing 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 have been pressuring Biden not to collect loan payments while the debt relief program is in legal limbo. Many of these groups have filed briefs asking 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 professionals — people who have carried us through the pandemic and who make our economies run every day,” said Randi Weingarten, President the American Federation of Teachers, which filed a brief in support of the plan. “But obstructionist ideologues are playing politics with their future and abusing the legal system simply to halt progress and worse, to deny President Biden an achievement that would help millions of people.”
The case is Biden vs. Nebraska.