Over a dozen student loan borrower advocacy organizations have submitted amicus curiae briefs with the U.S. Supreme Court, urging the justices to uphold President Biden’s embattled one-time student loan forgiveness plan.
Here’s what borrowers need to know.
Biden’s student loan forgiveness plan remains blocked by courts
Biden’s one-time student loan cancellation initiative was intended to erase billions of dollars in federal student loans. Qualifying borrowers who earned income below capped thresholds could receive either $10,000 or $20,000 in federal student loan forgiveness, depending on whether they received a Pell Grant.
The Biden administration suggested that up to 40 million borrowers could receive relief under the plan, and 26 million had already applied before federal courts blocked the program in response to multiple lawsuits.
The administration has appealed adverse decisions from two federal appeals courts to the U.S. Supreme Court, which agreed to take up the matter.
The first case: 8th Circuit Court of Appeals
In the first case out of the 8th Circuit Court of Appeals, a group of Republican-led states argues that Biden’s debt relief plan illegally deprives states of revenue by negatively impacting the coffers of state-related agencies that administer the Family Federal Education Loan Program (FFELP) – an older federal student loan program where federal loans are issued and administered by entities other than the federal government.
The coalition argues that borrowers consolidating FFELP loans into Direct loans to qualify for Biden’s debt relief plan harms these agencies and, therefore, the states due to their financial relationships with those agencies.
But the Biden administration counters that the financial link between FFELP agencies and state treasuries is tenuous, as is the alleged harm they would incur due to Biden’s student loan forgiveness plan.
The second case: 5th Circuit Court of Appeals
A second case the administration is appealing from the 5th Circuit Court of Appeals involves a conservative-leaning organization arguing on behalf of two student loan borrowers that the Biden administration did not follow proper administrative procedures in enacting the student debt relief program and deprived the borrowers of the ability to participate in a public comment period.
The Biden administration counters that it was authorized to create the program under the HEROES Act of 2003 without needing to go through a lengthy public comment period and that the two borrowers would actually be worse off if they did not receive student loan forgiveness – calling into question whether they even have standing to sue.
The Biden administration responds
Earlier this month, the Biden administration filed a legal brief with the Supreme Court, summarizing its argument that the justices should overturn the decisions from the 8th and 5th Circuits and uphold the student loan forgiveness program.
Advocacy groups urge Supreme Court to allow Biden’s student loan forgiveness plan to proceed
This week, a diverse coalition of over a dozen student loan borrower advocacy groups and allies filed briefs with the Supreme Court arguing that Biden’s student debt relief plan should be upheld.
Municipalities call legal standing into question
Several municipalities in the Republican-led states that brought the 8th Circuit case (which include Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) directly called into question whether these states even have standing to sue – a key argument made by the Biden administration, as well.
“[The states] point to supposed harms from federal administrative action that would require this Court to dig into the depths of speculation, even while the clear benefits are plentiful,” wrote the municipalities, which include the cities of Kansas City and Little Rock. “It cannot be the case that States—no matter what deference they receive—may run into federal courts based on policy disagreements and receive a nationwide injunction for such ephemeral harm… Student debt cancellation will strengthen state and local economies and promote household financial stability and public health, reducing reliance on state safety nets.”
Other organizations echoed the arguments
Other organizations, including consumer advocacy groups in the above states, echoed these arguments. “The States’ professed harms to their respective treasuries rest impermissibly on a series of speculative and unwarranted assumptions that fail to satisfy this Court’s requirements of an ‘actual or imminent’ injury in fact that is ‘likely caused by’ [Biden’s student loan forgiveness plan],” wrote ArchCity Defenders.
Legal scholars cite proper use of HEROES Act
Two dozen legal scholars submitted a brief arguing that the Biden administration’s reliance on the HEROES Act of 2003 – which does not require a public comment period for emergency regulations – was proper.
“[The Department of Education] took the exact type of action Congress empowered it to take…in the precise context Congress authorized it to act (national emergencies) for the specific purpose Congress intended (relief of borrowers affected by an emergency),” they wrote.
This brief reflects a separate amicus curiae brief submitted by former Rep. George Miller, one of the original drafters of the HEROES Act, which also argues that Biden’s student loan forgiveness plan falls squarely within Congress’s intent when it passed the legislation 20 years ago.
What’s next in student loan forgiveness court challenge?
The Supreme Court will consider the arguments made by the Biden administration and the advocacy groups who submitted amicus curiae briefs.
Next, the challengers must file their own legal briefs before the end of the month. Justice Department attorneys will then have the opportunity to reply to those arguments in writing.
The Supreme Court has scheduled a hearing for oral arguments on February 28, 2023.
This will be a critical hearing, where attorneys for all sides will be able to make their arguments and take questions from individual Supreme Court justices. Often, the way the justices ask questions can provide clues to how the court may ultimately rule.
When can we expect a final ruling on Biden’s student loan forgiveness?
A final ruling from the Court could be issued any time after February 2023, but most major Supreme Court decisions are issued in June.
The Biden administration has, in the meantime, extended the ongoing student loan payment pause to either June 30 or the date that the Supreme Court issues its decision – whichever occurs first. Student loan payments will then resume 60 days after the pause has ended.
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