Biden Administration Will Ask Supreme Court To Reinstate Student Debt Relief Plan

According to the latest court filing from the Department of Justice, the Biden administration will ask the Supreme Court for a reauthorization of its student debt relief program. The president’s plan to forgive $20,000 of student debt for millions of borrowers has been blocked by an appeals court and lower court decisions.

Thursday’s court filing by the DOJ showed that it plans to request the highest court to overturn an earlier injunction by the U.S. Court of Appeals, 8th Circuit. This injunction, which prevented the administration from implementing the debt forgiveness program, was rescinded by the Congressional Budget Office. It is estimated that the program will cost almost $400 billion over the next thirty years.

Separately, the agency is asking the 5th Circuit for an order to stop a Texas district court judge’s decision that had previously declared the plan “unlawful.” According to court records, the DOJ requested that the appeals court make a decision no later than Dec. 1, “to allow government to seek relief at the Supreme Court,” if necessary.

The administration claimed that allowing the debt relief plan to be stalled would make the federal government face an “unnecessarily dangerous choice”, in its filing. Tens of millions of Americans who were promised relief from debt will have to pay the full amount of their federal tuition debt if required debt payments are not rescheduled for January 1.

The nonprofit Committee for a Responsible Federal Budget says that if the Biden administration prolongs the payment pause it could “cost an extra $120 billion”. This would disproportionately benefit households with high incomes and increase the chance of recession.

Recent warnings from the Education Department have been made by President Joe Biden regarding a possible rise in default rates if the plan is not approved. They argue that debt relief would allow borrowers to save on average $300 per month.

James Kvaal, Education Undersecretary, wrote in a Tuesday filing that “We expect there to be an historically large rise in federal student loan defaults and delinquency as a consequence of the COVID-19 panademic.” “This could lead to one of the harms that one-time student loan debt relief program was meant to avoid.”

When the Biden administration announced its August debt relief plan, it hit a legal snag. It has been the subject of a flurry lawsuits from conservative legal groups and libertarian legal organizations. They claim that the administration was wrong to justify the massive relief plan under 2003 HEROES Act.

A lot of litigation against the debt relief program was rejected because plaintiffs who challenged the policy were unable to show that it has caused them harm. Supreme Court Justice Amy Coney Barrett, for example, has rejected two emergency appeals in separate cases. This is presumably because the eight other justices have not considered them.

However, lower courts have ruled in favor of the challenges.

The DOJ filed a new filing Thursday asking the 5th Circuit for a lifting of a Texas District Judge Mark Pittman decision. Pittman was an appointee to former President Donald Trump and ruled last week that Congress had overstepped its authority by imposing laws on such policies.

Biden’s plan will forgive $10,000 student loan debt for households earning less than $250,000 or those with a household income less than $125,000. Pell Grant recipients will receive an additional $10,000 in debt forgiveness.