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Biden Asks Supreme Court to Allow Student-Debt Relief Plan (1)

Nov. 18, 2022, 6:31 PM

President Joe Biden called on the US Supreme Court to let his student-loan relief plan take effect, setting the stage for a multibillion-dollar showdown that could affect more than 40 million borrowers.

Biden on Friday asked the nation’s highest court to lift a federal appeals court order that is now blocking the program. He also suggested the justices consider taking up the case without waiting for a final appeals court decision -- a schedule that could mean a definitive ruling by June.

The appeals court order “leaves millions of economically vulnerable borrowers in limbo, uncertain about the size of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations,” US Solicitor General Elizabeth Prelogar argued.

The administration filed the request with Justice Brett Kavanaugh, who handles emergency matters from the St. Louis-based 8th US Circuit Court of Appeals, which blocked the program. Kavanaugh could refer the matter to the full nine-member court.

The program would forgive as much as $20,000 in federal loans for certain borrowers making less than $125,000 per year or $250,000 for households. About 26 million people had requested forgiveness before the Department of Education stopped accepting applications. The department has said more than 40 million borrowers would be eligible.

The administration is fighting multiple challenges to the program. In the case now before the justices, six Republican-led states say Biden exceeded his authority under a law that lets the Education Department forgive loans during times of national emergency. Kavanaugh asked the states to respond by noon on Nov. 23.

The biggest issue for opponents has been establishing standing to sue -- that is, showing they are being directly harmed by the policy. The 8th Circuit said the states had standing because of the impact on a Missouri loan servicer that has financial ties to that state’s treasury.

The debt-relief plan has been on hold since Oct. 21, when the 8th Circuit issued an emergency order blocking the program.

The administration is waging a separate court fight with a conservative advocacy group that sued on behalf of two Texans who say their education debt was unfairly excluded from the program. A federal trial judge ruled against the administration in that case, and Prelogar said Friday the government will ask the Supreme Court to intervene in that case if need be.

“We are confident in our legal authority to carry out this program, and will be taking this fight to the Supreme Court so that borrowers can get the clarity and relief they deserve quickly,” Abdullah Hasan, assistant press secretary at the White House, said in a statement. “No matter how hard Republican officials and special interests try, President Biden will never stop fighting to deliver relief to working and middle class Americans.”

The case is Biden v. Nebraska, 22A444.

(Adds details about request starting in fourth paragraph.)

--With assistance from Madlin Mekelburg and Akayla Gardner.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Greg Stohr

© 2022 Bloomberg L.P. All rights reserved. Used with permission.