Supreme Court to decide legality of Biden’s student loan forgiveness program

by mcardinal

Vicky Arias, FISM News


On Thursday, the Supreme Court decided it will hear arguments on the legality of President Joe Biden’s student loan forgiveness plan in February and hand down a formal ruling by June 2023.

On Nov. 14, the U.S. Court of Appeals in the 8th district of St. Louis blocked Biden’s loan forgiveness program from going forward after a separate Texas ruling on Nov. 10 said the plan was unlawful.

Student loan repayments were paused in 2020 by then-President Donald Trump as a result of the coronavirus pandemic and have remained in place to the present. However, Biden had made a campaign promise to not just pause student loans but to instead pass the debt on to the American public by adding it to the growing national debt.

The Biden administration continued to face hurdles in executing his campaign promises, however, and in late November, he extended the pause on those repayments due to ongoing legal battles. The pause will continue until a period of 60 days after litigation in the matter is resolved.

The Biden administration announced in August its plan to partially forgive student loan debt for millions of student borrowers.

The main points of the plan include forgiving $10,000 in student debt if the student earns less than $125,000 per year or $250,000 per year for married couples and forgiving $20,000 of student debt if the borrower has received a Pell Grant in addition to their loan. A Pell Grant is a federal grant typically given to low-income students to help pay for college tuition.

Approximately 26 million individuals have applied to the program for debt relief, but no official cancellations of debt have occurred as of yet. The program has been frozen until the courts decide on the case, and the government is not currently accepting any new applications.

Six states, including Kansas, Missouri, Nebraska, Arkansas, Iowa, and South Carolina, sued the Biden administration claiming the forgiveness plan could hurt their tax revenue.

One of the issues at play is the argument over the interpretation of the Heroes Act of 2003.

In August 2003, then-President George W. Bush signed the Heroes Act into law, which states that the Secretary of Education may “waive or modify” rules for student financial assistance in certain instances where individuals have been affected by “war … or national emergency.”

President Bush stated at the time that the “Act permits the Secretary of Education to waive or modify Federal student financial assistance program requirements to help students and their families or academic institutions affected by a war, other military operation, or national emergency.”

The Biden Administration argues that it’s acting lawfully under the Act, citing the coronavirus pandemic as a national emergency, but the states argue that Biden is overstepping his legal rights. By Biden’s own admission, the pandemic is over.

A press release from the U.S. Department of Education explained that “targeted student debt relief addresses the financial harms of the pandemic, provides borrowers with [a] smooth transition back to repayment and helps borrowers at highest risk of delinquencies or default once payments resume.”

Opponents of the loan program argue that the program could burden taxpayers and claim that President Biden is using loan forgiveness as a tool to play politics.

The Congressional Budget Office has calculated that the proposed plan would cost the federal government around $400 billion. Conservatives argue that despite Biden’s claim that this is a “forgiveness plan,” in reality it is simply passing the financial burden on to the rest of the American public who did not take out loans or have already repaid their loans.

President Biden isn’t forgiving student loans—he’s charging hardworking Americans $400 billion,” Rep. Mariannette Miller-Meeks (R-Iowa) said of Biden’s plan in September.