AP

High court to rule on Biden student loan cancellation plan

Nov 30, 2022, 9:58 PM | Updated: Dec 2, 2022, 7:32 am

FILE - President Joe Biden answers questions with Education Secretary Miguel Cardona as they leave ...

FILE - President Joe Biden answers questions with Education Secretary Miguel Cardona as they leave an event about the student debt relief portal beta test in the South Court Auditorium on the White House complex in Washington, Oct. 17, 2022. The Biden administration is no longer accepting applications for student loan forgiveness after a second federal court shut down the program. (AP Photo/Susan Walsh, File)

(AP Photo/Susan Walsh, File)

WASHINGTON (AP) — The Supreme Court agreed Thursday to decide whether the Biden administration can broadly cancel student loans, keeping the program blocked for now but signaling a final answer by early summer.

That’s about two months before the newly extended pause on loan repayments is set to expire.

The administration had wanted a court order that would have allowed the program to take effect even as court challenges proceed. The justices didn’t do that, but agreed to the administration’s fallback, setting arguments for late February or early March over whether the program is legal.

President Joe Biden’s plan promises $10,000 in federal student debt forgiveness to those with incomes of less than $125,000, or households earning less than $250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for an additional $10,000 in relief.

The Congressional Budget Office has said the program will cost about $400 billion over the next three decades.

More than 26 million people already applied for the relief, with 16 million approved, but the Education Department stopped processing applications last month after a federal judge in Texas struck down the plan.

The administration said it was pleased the nation’s highest court had intervened, and Biden said on Twitter that the White House will keep fighting for the loan plan.

“Republican officials are throwing up roadblocks in order to prevent middle-class families from getting the student debt relief they need,” he said in a tweet.

The Texas case is one of two in which federal judges have forbidden the administration from implementing the loan cancellations.

In a separate lawsuit filed by six states, a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Louis also put the plan on hold, and that case is before the Supreme Court.

The moratorium had been slated to expire Jan. 1, a date that Biden set before his debt cancellation plan stalled in the face of legal challenges from conservative opponents.

The new expiration date is 60 days after the legal issue has been settled, but no later than the end of August.

Conservative attorneys, Republican lawmakers and business-oriented groups have asserted that Biden overstepped his authority in taking such sweeping action without the assent of Congress. They called it an unfair government giveaway for relatively affluent people at the expense of taxpayers who didn’t pursue higher education.

Missouri Attorney General Eric Schmitt, a Republican, said in a statement following the high court order that the Biden plan “would saddle Americans who didn’t take out loans or already paid theirs off with even more economic woes.” Missouri is one of the six states that sued to block the plan, along with Arkansas, Iowa, Kansas, Nebraska and South Carolina.

The administration has argued that the loan cancellations are legal under a 2003 law aimed at providing help to members of the military. The program is a response to “a devastating pandemic with student loan relief designed to protect vulnerable borrowers from delinquency and default,” the Justice Department said in court papers.

The law, the HEROES Act, allows the secretary of education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … as the Secretary deems necessary in connection with a war or other military operation or national emergency.”

In putting the program on hold, the 8th Circuit panel said there was little harm to borrowers because repayments have been suspended. Allowing the cancellations to proceed before a definitive court ruling would have had än “irreversible impact,” the appeals court said.

U.S. District Judge Mark Pittman, an appointee of former President Donald Trump, issued a more sweeping ruling in the Texas case, finding that such a costly program required clear congressional authorization.

The justices also will confront an important procedural question, whether anyone who has sued faces any legal or financial harm.

The 8th Circuit judges, two Trump appointees and one judge selected by former President George W. Bush, determined there might be financial costs to the Missouri Higher Education Loan Authority, and said that was enough.

In the Texas case, Pittman wrote that plaintiffs Myra Brown and Alexander Taylor could file their lawsuit, though neither faces financial harm. Brown is ineligible for debt relief because her loans are commercially held, and Taylor is eligible for just $10,000 and not the full $20,000 because he didn’t receive a Pell grant.

But Pittman said it was enough that the government did not take public comments on the program, meaning neither person had a chance to provide input on a program they would be at least partially excluded from.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

moore redmond washington...

Associated Press

U.S. Supreme Court rules against Redmond couple challenging foreign income tax

The court ruled in the case of Charles and Kathleen Moore, of Redmond, Washington after they previously challenged a $15,000 tax bill.

2 days ago

Image:The New York Giants' Willie Mays poses for a photo during baseball spring training in 1972. M...

Associated Press

Willie Mays, Giants’ electrifying ‘Say Hey Kid,’ dies at 93

Willie Mays, whose singular combination of talent, drive and exuberance made him one of baseball’s greatest players, has died. He was 93.

4 days ago

Image: This photo provided by the Washington Department of Ecology shows a derailed BNSF train on t...

Associated Press

Judge orders BNSF to pay Washington tribe nearly $400M for trespassing with oil trains

BNSF Railway must pay the sum to a Native American tribe in Washington after it ran 100-car trains with crude oil on the tribe's reservation.

5 days ago

Photo: In this photo provided by Tieanna Joseph Cade, an amusement park ride is shown stuck with 30...

Associated Press

Crews rescue 28 people trapped upside down high on Oregon amusement park ride

Emergency crews in Oregon rescued 28 people after they were stuck dangling upside down high on a ride at a century-old amusement park.

5 days ago

juneteenth shooting texas...

Associated Press

2 killed and 6 wounded in shooting during a Juneteenth celebration in a Texas park

A shooting in a Texas park left two people dead and six wounded, including two children, on Saturday, authorities said.

6 days ago

Photo: Israeli soldiers drive a tank near the Israeli-Gaza border, in southern Israel, Wednesday, J...

Jack Jeffery, The Associated Press

8 Israeli soldiers killed in southern Gaza in deadliest attack on Israeli forces in months

An explosion in Gaza killed eight Israeli soldiers, the military said Saturday, making it the deadliest attack on Israeli forces in months.

7 days ago

High court to rule on Biden student loan cancellation plan