Supreme Court will rule on Biden’s stalled $10K student loan forgiveness program

Just a day after another federal appeals court blocked Biden’s new student loan program, the high court agreed to hear arguments in February, with a decision expected by June.

Credit: Andrey Popov/Adobe Stock

The Supreme Court on Thursday – a day after another federal appeals court blocked the Pres. Joe Biden’s student loan forgiveness program – said it will decide the legal controversy surrounding the program but will leave the program blocked until after arguments in the case.

The justices ordered that arguments in Biden v. Nebraska will be held during the court’s February argument session, with the date to be determined.

The Biden administration had asked the high court to vacate the nationwide injunction against the program that was issued by the U.S. Court of Appeals for the Eighth Circuit, or grant review and decide the legal challenges in the current term. The administration’s request went to Justice Brett Kavanaugh who handles emergency matters from the Eighth Circuit.

The case stems from a suit by six GOP-led states: Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. In their challenge, the states argue the plan violates the separation of powers and the Administrative Procedure Act because it exceeds the authority of the secretary of education, and is arbitrary and capricious.

In responding to the administration’s emergency application, Nebraska Solicitor General James Campbell told the justices that the Biden administration is using the COVID-19 pandemic as a “pretext” to mask the president’s “true goal” of fulfilling his campaign promise to erase student loan debt.

“The Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act), does not authorize this sweeping action of great economic and political significance,” Campbell wrote in response to the administration’s request to vacate the injunction. “The act requires a real connection to a national emergency.”

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Campbell added, “In addition, the act’s text and context demonstrate that its purpose is to keep certain borrowers from falling into a worse position financially in relation to their student loans. Yet the [Education] secretary uses it here to place tens of millions of borrowers in a better position by canceling their loans en masse.”

U.S. Solicitor General Elizabeth Prelogar, however, criticized the Eighth Circuit ruling, saying the appellate court failed to analyze the text of the statute or the data supporting the plan. She also wrote that the states, as the district court held, lacked standing to challenge the plan.

“On the merits, the plan falls squarely within the plain text of the secretary’s statutory authority,” Prelogar wrote. “Indeed, the entire purpose of the HEROES Act is to authorize the secretary to grant student-loan-related relief to at-risk borrowers because of a national emergency—precisely what the secretary did here. And the plan rested on the secretary’s examination of the relevant economic data and the department’s long experience with borrowers transitioning back into repayment.”

Under the student debt relief plan, the U.S. Department of Education will provide up to $20,000 in debt relief to Pell Grant recipients with loans held by the Education Department and up to $10,000 in debt relief to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households.

Because of the litigation, loan payments have been paused by the administration until June 30.

The student loan program is the fourth Biden administration policy to go before the justices in the past 12 months.