Supreme Court Will Hear Debate Over Biden’s Suspended Student Loan Forgiveness Plan

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The Supreme Court is to borrowers who will hear verbal arguments in a lawsuit challenging President Joe Biden’s student loan forgiveness plan, the court announced Thursday.

important facts

The court said Thursday it will consider the Biden v Nebraska case, in which a coalition of Republican-led states (Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) sued to block the Biden Administration’s student loan forgiveness plan. federal loan borrowers.

The lawsuit argues that the Biden Administration has exceeded its authority to impose the amnesty program and has a negative impact on states by damaging tax revenues from state-run programs servicing federal loans, while the Biden Administration argues that states do not. stands to challenge its policy.

The Biden Administration asked the court to hear the case after the 8th Circuit Court of Appeals ruled against the White House and decided to block policy while the case against him was pending, one of two court orders in separate cases to enforce the policy and disburse the funds.

The court said oral discussions on the case would take place in February and a decision should be made a few months later, when the court’s mandate expires in June.

The Biden Administration has also asked the court to temporarily reinstate the policy while the case is pending, but the court has now refused to do so and has delayed that decision until after oral discussion, meaning debt relief will remain blocked until February at the earliest, and possibly until a final decision is made in June – student for the resumption of the moratorium on loan repayments on 30 June.

The White House and the Department of Education have yet to respond to requests for comment.

Important Quote

The 8th Division order, which blocked the amnesty plan, “leaves millions of economically vulnerable borrowers uncertain about the extent of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations,” the Biden Administration wrote in its petition asking the court to take the case.

What to Watch?

The Supreme Court may also hear a second case regarding student loan forgiveness, after the 5th Circuit Court of Appeals denied the White House’s request Wednesday to reinstate the program in a second lawsuit. This lawsuit was filed by the conservative Job Creators Network on behalf of individual debtors and resulted in the program being canceled by a Trump-appointed district judge in November, after the forgiveness policy hurt debtors due to the lack of a public comment period. The Biden Administration informed the court ahead of the 5th Circuit’s decision that it plans to take the case to the Supreme Court if the appeals court decides against it, but has not yet submitted a file to the court on Thursday afternoon. Both cases will eventually need to be resolved in the Biden Administration’s favor for the student loan forgiveness program to take effect.

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26 million. According to the Biden Administration, that’s the number of federal student loan recipients who applied for student loan forgiveness before program applications were suspended on Nov. 11—more than half of the 43 million borrowers eligible for debt relief.

Key Background

The Biden Administration announced in August that it would forgive $10,000 of federal student debt for borrowers earning less than $125,000 or a $20,000 donation for Pell Grant recipients. The White House justified the program under the federal HEROES Act, which allows the education minister to “waiver or change” any student financial aid program in the event of a national emergency, as the Biden Administration has championed the Covid-19 pandemic. Although hailed by many borrowers, the program has drawn widespread criticism from Republicans, and the challenge from GOP states is one in a series of lawsuits opposing the program. The Supreme Court’s decision to handle the case comes after Judge Amy Coney Barrett dismissed many other legal objections to the pardon plan and acted alone as the justice that considered cases from this appeals court. These cases were based on different legal reasoning and were seen as weaker appeals than the GOP states’ case, but this gave the court reason to address the issue now.

further reading

Biden Asks Supreme Court To Restore Student Loan Forgiveness – Where The Program Is Now (Forbes)

Appeals Court Rules Against Biden’s Student Loan Forgiveness Plan—Possibly Sending Second Case to Supreme Court (Forbes)

59% of Student Loans Will Struggle To Pay Off Loans As Loan Forgiveness Stabilizes According To Survey (Forbes)

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