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Monday, June 17, 2024 | Back issues
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Supreme Court sets up doubleheader on Biden’s student loan forgiveness plan

A plan to cancel billions of dollars worth of higher ed debt is waiting on the outcome of two cases now set for separate oral arguments.

WASHINGTON (CN) — The Supreme Court on Monday padded its docket with a second challenge to President Joe Biden’s student debt relief plan. 

Earlier this month the court agreed to hear arguments between Biden and red states that sued to stop debt relief from millions of Americans. This second challenge comes from student loan borrowers ineligible for the program. As with the states’ challenge, the justices will hear the case in February. So far, the court has no plans to consolidate the two cases.

Biden asked the justices for emergency relief to block a court ruling of Texas that vacated the program in November.

The suit was brought by Myra Brown and Alexander Taylor — two student loan borrowers who do not meet the qualifications for Biden’s plan. Brown falls short of the benefit because she took out private loans, not federal loans as covered by the program. While Taylor qualifies for some relief, she will not receive the full amount because of income qualifications on the types of loans under Biden’s forgiveness plan. 

Under the Higher Education and Opportunities Act — nicknamed the Heroes Act — Biden claims he can instruct the education secretary to forgive federal student loans so that borrowers do not fall into financial peril because of the Covid-19 pandemic. The law was adopted a couple of years after the 9/11 terrorist attacks, allowing for student debt forgiveness in cases of a national emergency. 

Biden’s plan forgives up to $10,000 for borrowers under a certain income threshold and up to $20,000 for students who qualified for low-income loans meeting the same income standard. Brown and Taylor claim Biden should have allowed more borrowers to qualify for the program, and that the government denied them the opportunity to tell the education secretary this by foregoing the standard notice-and-comment period. 

A federal judge threw out the procedural question presented by the precluded notice-and-comment period because the Heroes Act exempts the secretary from following those procedures. While the borrowers did not make claims on Biden overextending his authority by using the Heroes Act in this manner, the judge said Brown and Taylor had still been harmed by the program and threw it out anyway. 

At the Supreme Court, the justices will consider if Brown and Taylor had standing to bring their suit and if the plan was lawful and adopted in an appropriate manner. 

U.S. Solicitor General Elizabeth Prelogar chastises the district court for ruling on an issue not before them and claims the administration’s use of the Heroes Act is appropriate. 

“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,” Prelogar wrote in Biden’s application. 

Repayments on federal student loans have been paused since the onset of the Covid-19 pandemic. Biden extended the pause until 60 days after the program is implemented, lawsuits are resolved, or June 30, if litigation fails. 

Follow @KelseyReichmann
Categories / Appeals, Consumers, Education, Financial, Government

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