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Supreme Court’s Help Sought to Settle Challenges to Student Loan Forgiveness Plan

student loan relief written on chalkboardThe Biden administration’s filing with the Supreme Court is to allow the student loan forgiveness plan to resume while legal challenges play out. Meanwhile, Republican leaders in the House are demanding answers on the costs of the plan and advocates call for the student loan repayment pause to continue into 2023.

11/18/2022 1:50 P.M.

3 minute read

The Biden administration, with the help of the U.S. Department of Justice (DOJ), is turning to the U.S. Supreme Court for help with legal challenges to its student loan forgiveness plan—in particular, one arguing that the plan goes beyond what Congress allows.

According to a report from The Hill, the request is part of an expansive legal strategy to respond to lawsuits challenging the plan.

“In its Thursday filing, the Department of Justice, on behalf of the administration, said in effect that it would be asking the relevant courts to clear the way for Biden’s debt relief program to be reinstated,” according to the article.

The DOJ is seeking to remove an injunction preventing the plan from moving forward in the U.S. Court of Appeals for the 8th Circuit as well as a pause from the U.S. Court of Appeals for the 5th Circuit in a Texas case that found the plan is illegal.

In the Texas case, U.S. Secretary of Education Miguel Cardona issued a statement on the court’s ruling in a news release: “We believe strongly that the Biden-Harris Student Debt Relief Plan is lawful and necessary to give borrowers and working families breathing room as they recover from the pandemic and to ensure they succeed when repayment restarts. We are disappointed in the decision of the Texas court to block loan relief moving forward. Amidst efforts to block our debt relief program, we are not standing down. The Department of Justice has appealed today’s decision on our behalf, and we will continue to keep borrowers informed about our efforts to deliver targeted relief.”

Several other cases in courts across the U.S. are on the books challenging the student loan forgiveness plan, but those in the appeals process in the 5th and 8th Circuits carry the most weight at this time.

Associate Professor of Law at the University of Missouri Thomas Bennett told The Hill that there is more of a chance the Supreme Court will take on these cases if multiple courts issue different decisions on the plan and create a circuit split.

All activity on the student loan forgiveness plan is at a standstill while the legal challenges play out, including removing debt relief applications from the U.S. Department of Education’s website.

The Hill reports there is no timeframe as to when a decision on the legal challenges to the plan will come down and student loan advocates are calling for a return to extending the pause on loan repayments set to end on Dec. 31.

Plan Costs in Question

Meanwhile, Republican leaders from the House Education and Labor Committee and House Budget Committee are seeking answers on the costs of the student loan program amidst the legal challenges.

Education and Labor Committee Republican Leader U.S. Rep. Virginia Foxx, R-N.C., and House Budget Committee Republican Leader Jason Smith, R-Mo., sent a letter to White House Office of Management and Budget (OMB) Director Shalanda Young to request “documents and correspondence related to President Biden’s executive order earlier this year that overhauled the federal student loan program at an estimated cost to taxpayers of more than $1 trillion,” according to a news release.

In the letter (PDF), Foxx and Smith “note that cost estimates of President Biden’s executive action on student loans include $400 billion for student loan cancellation, $105 billion for the loan repayment moratorium, and $450 billion for an expanded income-driven repayment (IDR) plan.”

The legislators request full documentation of the Biden administration’s student loan cancellation from the OMB.

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