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Supreme Court to hear arguments over Biden’s student loan forgiveness plan

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WASHINGTON — The Supreme Court on Thursday delayed a decision on whether to honor President Joe Biden’s bid to implement his student loan forgiveness plan, announcing instead that it will urgently consider the full pleas.

In a brief order, the court said it would hear arguments in February, with a decision to follow soon. Meanwhile, the plan remains blocked.

Attorney General Elizabeth Prelogar filed an emergency petition on behalf of the Biden administration on Nov. 18, asking the justices to overturn an order issued by the St. Louis-based 8th United States Circuit Court of Appeals. In a separate case, a federal judge in Texas also blocked the plan. The 5th U.S. Circuit Court of Appeals declined Wednesday to overturn that detention, meaning the government could soon appeal that case to the Supreme Court as well.

Prelogar said the 8th Circuit’s decision “leaves millions of economically vulnerable borrowers in limbo, unsure of the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations.”

Several people and groups have challenged the proposal, with the case now in the Supreme Court with claims from six states: Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. The states’ lawsuit is supported by 17 other states.

A federal judge had ruled that the states had no legal authority to pursue the lawsuit, but the appeals court disagreed, focusing on a Missouri agency that issues federal student loans. The state argues that the agency would lose revenue if loans were forgiven.

In court documents, the states’ attorneys said the administration used the Covid pandemic as “a pretext to mask the president’s true goal of fulfilling his campaign promise to eliminate student loan debt.”

A major obstacle for those who challenge the program is that they have had to show legal standing to sue by illustrating how they are being harmed by the program. Even if the Supreme Court ruled that the states have standing and then answered the legal question of whether Biden had the authority to forgive the loans, the administration would most likely face an uphill battle, with the court’s conservative majority skeptical of broad claims of federal power. For example, in January the court blocked Biden’s Covid vaccination or testing requirement for larger companies.

The program, which allows eligible borrowers to cancel up to $20,000 in debt, has been stalled since the 8th Circuit issued a temporary halt in October. The administration has now closed the application process.

The White House said on Thursday it looks forward to oral arguments in February.

“We welcome the Supreme Court’s decision to hear the case on our student debt relief plan for middle and working class borrowers in February,” White House press secretary Karine Jean-Pierre said in a statement, which called the program “legal, backed by careful analysis”. of administrative lawyers.”

Under another Covid-related presidential order, borrowers are currently not required to pay. The administration on Nov. 22 extended that repayment hiatus through the end of June or until the lawsuit is resolved, whichever comes first; payments would recommence at the end of August if not resolved by the end of June.

“As we previously announced, student loan payments will be suspended while the Supreme Court resolves the case,” Jean-Pierre said Thursday.

The challengers argued that the administration’s plan — announced by Biden in August and originally scheduled to go into effect this fall — violates the Constitution and federal law, in part because it circumvents Congress, which they say has the power has to make laws regarding student loan forgiveness.

Biden’s program would forgive up to $10,000 in debt for borrowers earning less than $125,000 a year (or couples who file taxes jointly and earn less than $250,000 a year). Pell Grant recipients, the majority of borrowers, would qualify for an additional $10,000 in debt relief. The overall program is expected to help more than 40 million borrowers, the administration said.

The nonpartisan Congressional Budget Office estimated in September that Biden’s plan would cost $400 billion, while the Department of Education said the price tag was closer to the $379 billion.

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