Supreme Court Asked to Block Biden Student Debt Relief Program: A group of Wisconsin taxpayers has petitioned the Supreme Court to intervene urgently and temporarily halt the implementation of the Biden administration’s student loan forgiveness scheme. On Monday, the process for applying for student loan forgiveness became official.
If the court does not step in, student loan cancellation, valued up to $20,000 per qualified borrower, could start as early as Sunday, October 23, according to the filing from the Brown County Taxpayers Association.
The lower court that made the decision was under the jurisdiction of Justice Amy Coney Barrett, who received the request. She’ll probably refer the case to the entire court. Numerous legal challenges to the program are being made against the Biden administration, but this is the first to make it to the Supreme Court.
At the lower court level, the taxpayer group’s complaint has not made any progress. Within two days of the lawsuit’s filing, a federal trial-level judge rejected it after determining that the defendants lacked legal standing to submit the claim.
The US 7th Circuit Court of Appeals also rejected the plaintiff’s urgent plea for a delay in a one-sentence ruling. The Wisconsin Institute for Law and Liberty is defending the Brown County Taxpayers Association’s claim that the President lacks the legal power to carry out his student loan forgiveness program.
Lawyers for the group stated in a recent Supreme Court petition that the program’s adoption would deal a “staggering blow” to the US Treasury and taxpayers. The authors concluded, “We are witnessing a gigantic growth in the national debt achieved through a blatant contempt for constraints on the constitutional spending authority.”
According to the Biden administration, a 2003 statute known as the HEROES Act granted the secretary of education the authority to erase the debt. The cost of Biden’s student loan forgiveness program has been estimated by the nonpartisan Congressional Budget Office to be $400 billion.
How Biden’s Student Loan Forgiveness Plan Could Work?
Before federal student loan payments start in January following a nearly three-year hiatus due to the pandemic, Biden’s student loan forgiveness initiative, which was first unveiled in August, intends to provide debt relief to millions of borrowers.
The application was launched on Monday, but according to court filings, the Biden administration has agreed to delay any debt cancellation until October 23. Most qualified borrowers are anticipated to receive debt relief within weeks once processing starts.
Individual borrowers who made less than $125,000 in 2020 or 2021 and married couples or heads of households who made less than $250,000 will have up to $10,000 of their federal student loan debt canceled under Vice President Biden’s proposal.
A borrower is qualified for up to $20,000 in debt forgiveness if they also obtained a federal Pell grant while attending college.
Mounting Legal Challenges
Six GOP-controlled states have separately requested in a separate lawsuit that a federal judge halted the cancellation of student loans pending the outcome of the dispute. The judge’s ruling on that request is anticipated soon, but the losing side is anticipated to appeal right away.
As a result, the case would be sent to the 8th Circuit Court of Appeals, where it would probably encounter a group of conservative judges. States claim the Biden administration lacks the legal authority to offer extensive student loan forgiveness.
The states assert that the regulation will financially harm them as well as the earnings of MOHELA, a student loan servicer with headquarters in Missouri.
Supreme Court asked to block Biden student debt relief program https://t.co/bauJpDSYJ3
— The News with Shepard Smith (@thenewsoncnbc) October 19, 2022
According to the lawsuit, the loan forgiveness program encourages customers to combine Federal Family Education Loans that MOHELA owns into Direct Loans that the government owns, “depriving them (MOHELA) of the continued money it obtains from servicing such loans.”
The Department of Education changed its policy on the same day the lawsuit was filed, making borrowers who had federal student loans that were guaranteed by the government but held by private lenders, including those from the previous Federal Family Education Loan program, ineligible for debt relief.
Around 700,000 people were removed from the student loan forgiveness program as a result of the decision.