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Biden plan to forgive student loans headed to the Supreme Court

Court rulings have blocked Biden’s student loan forgiveness plan. Supreme Court is the next stop.

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Jason Flechsing, a senior at Boise State University, does class work in Boise.

Jason Flechsing, a senior at Boise State University, does class work in Boise on Thursday, Sept. 22, 2022. Flechsing has federal student loans. which could be lessened under President Joe Biden’s loan forgiveness program.

Ben B. Braun, Deseret News

A second federal court of appeals dealt another blow to the Biden administration’s student loan forgiveness plan this week, setting the stage for a hearing before Supreme Court.

On Thursday, the Supreme Court granted certiorari, which means it will hear oral arguments in the case, Biden v. Nebraska, during its February 2023 session.

Earlier this week, the 5th Circuit Court of Appeals ruled it would not pause a ruling from a Texas judge striking down the policy, CNN reported. The 8th Circuit Court of Appeals issued an earlier ruling that blocked the loan forgiveness program.

In an earlier statement, Secretary of Education Miguel Cardona called efforts to block student debt relief “callous” and the lawsuits “baseless.”

The moves “have caused tremendous financial uncertainty for millions of borrowers who cannot set their family budgets or even plan for the holidays without a clear picture of their student debt obligations, and it’s just plain wrong,” Cardona said.

The 5th Circuit ruling comes as the Biden administration has begun notifying people who are approved for federal student loan relief, even as the future of the program remains in legal limbo.

Under the plan, borrowers can qualify for up to $10,000 in student loan forgiveness while Pell Grant recipients are eligible for an additional $10,000 in forgiveness.

Relief is available for borrowers who earn less than $125,000 per year or $250,000 per year for a married couple filing taxes jointly.

According to the Department of Education, more than 26 million people had applied for student loan relief prior to the recent court decisions and 16 million borrowers have been approved.

“But court orders are blocking the department from discharging student loan debt and accepting additional applications,” according to a department press release. 

The administration announced on Nov. 22 that it has extended the pause on loan repayment instituted during the COVID-19 pandemic. Payments were set to resume in January.

According to the Education Department statement, payments will resume 60 days after the department is permitted to implement the program or the litigation is resolved.

“If the program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that,” the statement said.

Cardona, in the statement, told borrowers “that the Biden-Harris administration has their backs and we’re as committed as ever to fighting to deliver essential student debt relief to tens of millions of Americans. We’re extending the payment pause 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.”