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SCOTUS to Hear Student Loan Case

Government

The front of the US Supreme Court building in Washington, DC. | Image by Shutterstock

The Supreme Court agreed on Thursday to determine whether the Biden administration exceeded its authority with its plan to shift hundreds of billions of dollars in student debt away from borrowers.

The justices left in place an injunction blocking the Biden administration’s attempt to cancel up to $10,000 in debt per borrower, or $20,000 for borrowers who received Pell Grants.

The justices put the case on a high-speed track, saying they would hear arguments in February, according to The New York Times.

The court acted after the Justice Department filed an emergency application asking the justices to lift the injunction, which had been issued by the U.S. Court of Appeals for the Eight Circuit in St. Louis at the request of six Republican-led states, Nebraska, Missouri, Iowa, Arkansas, South Carolina, and Kansas.

“Now, while President Biden publicly declares the pandemic over…[his administration is] using Covid-19 to justify the mass debt cancellation — an unlawful attempt to erase over $400 billion of the $1.6 trillion in federal student-loan debt and eliminate all remaining loan balances for roughly 20 million of 43 million borrowers,” argued attorneys for the six states.

The states argue that President Biden’s proposal overstepped his executive authority and would deprive them of future tax revenue. The program has set off several legal battles, but the one filed by these six states may represent the most severe threat, according to The New York Times.

Since March 2020, most borrowers have been able to pause payments due to a COVID-19 relief measure. The measure, enacted by President Trump, was extended several times, including most recently on November 22 by President Biden.

The student debt moratorium is expected to end in June. According to a poll conducted by Morning Consult, 59% of student loan borrowers said they will not be able to make their payments when that deadline comes around.

Some 26 million borrowers have applied for student loan debt relief, and the government has approved 16 million of these applications. Still, the debt has yet to be canceled. The government’s student debt balance sits at $1.5 trillion, according to the New York Times.

The proposed debt cancellation would be one of the most expensive executive actions in U.S. history, expected to cost around $400 billion.

The Biden administration said it has the authority to forgive the student loans under the Heroes Act of 2003, which allows the education secretary to waive regulations related to student loans during times of war or national emergency. Since the beginning of the pandemic, the country has been operating under an emergency declaration put into place by President Trump.

The states fighting the bill argue that the plan “is not remotely tailored to address the effects of the pandemic” and is instead aimed at fulfilling “the administration’s political agenda on student loans.”

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Hump
Hump
1 month ago

Biden can postpone repayments seemingly indefinitely, but can’t forgive it outright?

seems like a contradiction.