Supreme Court Keeps Biden’s Student Loan Program on Hold, Agrees to Hear Case

Justices of the US Supreme Court pose for their official photo at the Supreme Court in Washington on Oct. 7, 2022. Olivier Douliery/AFP via Getty Images

The U.S. Supreme Court on Thursday confirmed it will hear an emergency challenger to President Joe Biden’s student loan debt program and will keep the plan on hold.

In a brief order, the high court wrote that it would hear oral arguments in February of next year. But in the interim, the Biden administration’s program will remain blocked.

Announced by Biden in August—about two months before the Nov. 8 midterm elections—the plan would cancel hundreds of billions of dollars in federal student loan debt. The Congressional Budget Office estimated earlier this year that Biden’s plan would cost around $400 billion, and the Education Department had said it would total about $379 billion.

The forgiveness program included up to $20,000 in loan relief plans for low- and middle-income individuals. About 26 million people already have applied for student loan forgiveness, while about 16 million applications have been approved, according to the Department of Education.

Attorneys general in the Republican-led states of Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina filed a lawsuit against the program. Several groups and individuals have also challenged the proposal.

Lawyers for the administration earlier this month asked the Supreme Court to reverse a lower court’s injunction against the program. Two courts—the St. Louis-based 8th U.S. Circuit Court of Appeals and a federal court in Texas—blocked the plan, while the Biden administration’s Supreme Court petition was in response to the appeals court ruling.

Arguments

Solicitor General Elizabeth Prelogar on Nov 18. filed a petition arguing that the Supreme Court should lift the injunction because it “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.”

In a filing responding to the administration’s petition, the six aforementioned states said they have the legal standing to file a lawsuit against the federal program because it would harm their tax revenue. They also said the program exceeds the executive branch’s authority.

“The act requires a real connection to a national emergency,” the states’ lawyers wrote in court papers last week (pdf). “But the department’s reliance on the COVID-19 pandemic is a pretext to mask the president’s true goal of fulfilling his campaign promise to erase student-loan debt.”

Elizabeth Prelogar testifies before a Senate Judiciary Committee hearing on Capitol Hill in Washington, on Sept. 14, 2021. U.S. Senate/Handout via Reuters

“Hiding the real motive,” it added, “the agency attempts to connect the cancellation to the pandemic by citing current economic conditions supposedly caused by COVID-19.”

What’s more, they argued that the Biden administration lacks the authority to put place student loan borrowers in a “better position” financially.

“The Secretary uses it here to place tens of millions of borrowers in a better position by cancelling their loans en masse,” the filing said. “The Act does not allow the Secretary to effectively transform federal student loans into grants. It is telling that the Secretary has never before used the Act in this way.”

Prelogar had argued that the states did not have the legal standing to file their lawsuit. The federal government is also acting within its authority to set up a debt-relief program, she wrote.

In a Twitter post issued by Biden’s account on Nov. 22, the administration said the president is “confident that our student debt relief plan is legal ... but it’s on hold because Republican officials want to block it.”

Some Republicans said the plan, among other eleventh-hour decisions made before the midterms, is an attempt to bribe voters into casting ballots for Democrat candidates.

“These responsible Americans paid off their student debt, worked their way through college, or chose a career path that did not require student debt—but Biden is now forcing them to pay off other people’s loans,” Rep. Lauren Boebert (R-Colo.) told The Epoch Times on Oct. 21.

Other Moves

Earlier this week, the 5th U.S. Circuit Court of Appeals refused to lift the Texas judge’s hold on the program. The Biden administration, too, could soon appeal that case before the Supreme Court.

Under a separate COVID-19-related executive order, those with student loan debt do not have to make payments. The White House last week pushed back the payment pause until June of next year or until the lawsuits are resolved and blamed Republicans.

“We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” Education Secretary Miguel Cardona said in a statement about the pause.