Supreme Court kept student loan debt relief on hold

According to a brief order, the Supreme Court kept President Joe Biden’s student debt relief program on hold on Thursday and scheduled oral arguments to decide if the program can continue until some time in February, according to a report by The Washington Examiner.

The court’s ruling means that, at least until then, the debt cancellation program will not be implemented. The Biden administration had asked the Supreme Court to grant permission for the program to continue while several legal challenges were being examined by lower courts.

For Pell Grant recipients, the initiative seeks to provide debt cancellation of up to $20,000 in relief, while millions of debtors are eligible for $10,000 in relief.

On behalf of the Biden administration, Justice Department Solicitor General Elizabeth Prelogar submitted an emergency appeal to the Supreme Court on November 18 asking them to overturn an injunction issued by the U.S. Court of Appeals for the 8th Circuit.

A federal judge in Texas stopped the proposal in a different case. The hold was not lifted by the U.S. Court of Appeals for the 5th Circuit on Wednesday, which means the Biden administration may soon take that case to the Supreme Court as well.

Millions of economically vulnerable borrowers in limbo

The Department of Justice contends in a brief that the 8th Circuit’s ruling “leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations.”

The government has argued that the HEROES Act of 2003 gives the Education Department broad authority to forgive the student debt of millions of borrowers.

The decision by a second federal appeals court to reject the administration’s request to have the ruling prohibiting the student debt relief policy lifted is a major setback for the government.

Although the Biden administration confronts a difficult legal battle, attorneys and analysts claim the plaintiffs who prevailed at the appeals court level still struggle to establish their legal standing to oppose the Biden administration’s strategy.

“The Biden administration’s argument, in essence, is that the alleged harm is too speculative, or that the plaintiffs had no legal basis to expect to benefit from the continuation of the student loan program,” Gerard Filitti, senior counsel at the Lawfare Project, told the Washington Examiner.

Biden blocked

According to Filitti, the judges could focus their inquiry more specifically on identifying “who, if anyone, has a right to suit to block Biden’s action.”

Earlier this month, six states with a majority of Republicans requested the Supreme Court to reject President Joe Biden’s effort to forgive billions of dollars in student debt, setting the stage for a legal fight against the proposal that might have an impact on 40 million Americans.

The six states are Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina. They contend that the Biden plan violates the separation of powers because it seeks to implement a sizable debt relief program that the Congressional Budget Office estimates will cost close to $400 billion over the next 30 years.

“The administration is once again invoking the COVID-19 pandemic to assert power far beyond anything Congress could have conceived,” the states told the high court in a 42-page brief. “While President Biden publicly declares the pandemic over, the secretary and Department of Education are using COVID-19 to justify the mass debt cancellation.”