Student Loans

Supreme Court Takes Biden Student Debt Relief Case, Holds Program for Now

Jonathan Ernst | Reuters
  • The Supreme Court said it will hear arguments in February in a case challenging the Biden administration's student loan debt relief plan.
  • But the Supreme Court kept in place a lower appeals court's injunction that prevents that program from taking effect for now. The plan is estimated to cost $400 billion if it is allowed.
  • President Joe Biden's plan would cancel up to $20,000 in debt for millions of people who took out student loans. About 16 million people so far had been approved for the program.
  • The administration agreed to extend a pause in required payments on federal student loans until after June, or until court-issued blocks on the debt forgiveness plan are removed.
US President Joe Biden speaks in the Eisenhower Executive Office Building in Washington, D.C., US, on Monday, Oct. 17, 2022.
Bonnie Cash | Bloomberg | Getty Images
US President Joe Biden speaks in the Eisenhower Executive Office Building in Washington, D.C., US, on Monday, Oct. 17, 2022.

The Supreme Court said Thursday that it will hear arguments in a case challenging the Biden administration's student loan debt relief plan — but kept in place a lower appeals court's nationwide injunction that prevents that program from taking effect for now.

Oral arguments in the case were set for February in the order released Thursday.

The administration on Nov. 18 asked Justice Brett Kavanagh to lift an injunction against the student loan relief program, which would cancel hundreds of billions of dollars in federal debt.

The U.S. 8th Circuit Court of Appeals in St. Louis issued that injunction on Nov. 14 in response to a legal challenge by six Republican-led states. Kavanagh is the Supreme Court justice responsible for handling emergency applications arising from 8th Circuit cases.

In its order Thursday, the Supreme Court said that consideration of the application to lift the injunction "is deferred pending oral argument."

White House Press Secretary Karine Jean-Pierre in a statement said, "We welcome the Supreme Court's decision to hear the case on our student debt relief plan for middle and working class borrowers this February."

"This program is necessary to help over 40 million eligible Americans struggling under the burden of student loan debt recover from the pandemic and move forward with their lives," Jean-Pierre said. "The program is also legal, supported by careful analysis from administration lawyers."

She noted that the Biden administration last week extended a pause in required payments on federal student loans until after June, or until court-issued blocks on the debt forgiveness plan are removed.

Days before the 8th Circuit issued its injunction against the debt relief plan, Judge Mark Pittman in U.S. District Court in Texas ruled the debt relief plan was unconstitutional, in response to another lawsuit challenging the program.

That ruling, which also applies nationwide, likewise remains in effect.

The Biden administration had asked the federal 5th Circuit Court of Appeals in New Orleans to put a temporary hold on the decision.

But on Wednesday night, the 5th Circuit refused to grant that hold. The administration was expected to ask the Supreme Court to block Pittman's ruling from remaining in effect.

President Joe Biden's plan would cancel up to $20,000 in debt for millions of people who took out student loans.

By early November, before the injunctions were issued, nearly 26 million people had applied for the program. About 16 million applications had been approved before the program was suspended.

Education Secretary Miguel Cardona, in a Nov. 23 statement announcing the extension of the loan payment pause, said it was justified "because it would be deeply unfair to ask borrowers to pay a debt that they wouldn't have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests."

Without that pause, federal student debt holders would have been scheduled to resume their payments in January.

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