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Biden admin asks Supreme Court to let student loan forgiveness program continue

(WASHINGTON) — After a significant loss in the courts earlier this week, the Biden administration on Friday asked the Supreme Court to weigh in on its fight to keep its student loan relief program alive.

The program, which aimed to relieve between $10,000 and $20,000 in student loans for borrowers who make below a certain income, was blocked by the 8th Circuit Court of Appeals after six conservative states brought a lawsuit against the Department of Education, arguing that the policy is an abuse of power.

In an escalation of the legal fight, the Biden administration has asked the justices to overturn that nationwide injunction and let the program go on, arguing that Education Secretary Michael Cardona is completely within his authority because of a law called the HEROES Act, which gives the power to cancel loans during a national state of emergency like the pandemic.

“On the merits, the plan falls squarely within the plain text of the Secretary’s statutory authority,” Solicitor General Elizabeth Prelogar wrote in the Supreme Court filing.

“Indeed, the entire purpose of the HEROES Act is to authorize the Secretary to grant student-loan-related relief to at-risk borrowers because of a national emergency — precisely what the Secretary did here,” Prelogar wrote.

It is the secretary’s job “to ensure that borrowers affected by a national emergency are not worse off in relation to their student loans,” Prelogar argued, and if the Department of Education didn’t act, there could be a “spike” in loan defaults when the pause on student loan payments lifts in January.

That impending deadline of Jan. 1 — when the nearly two-year long moratorium on payments is expected to end — adds extra pressure on the administration.

Officials rolled the program out in late August with the pledge that anyone who applied before mid-November could have their loans canceled by the time payments resumed.

As legal losses halted that timeline, though, the Education Department began to consider extending the moratorium once again — though officials caution that it’s not an ideal plan.

“…The Department estimates that if it temporarily extends the existing COVID-19 pandemic payment and interest accrual pause for federal student loan holders, it will cost taxpayers several billion dollars a month in unrecovered loan revenue,” the Department of Education Under Secretary James Richard Kvaal said in a recent legal filing.

Still, advocacy groups, including the Student Debt Protection Center and the NAACP, are pushing for the administration to keep the moratorium in place while the courts decide, rather than ask people to begin paying down their loans again with the fate of the program up in the air.

The groups argue that it will undermine the Biden administration’s own argument for the debt relief if it lifts the moratorium without any loan cancellations, since the reason for canceling debt is that the pandemic left people in a position where they would be unable to get back on their feet if the moratorium was lifted without any assistance from the government.

The Supreme Court is expected to respond to the Biden administration’s request in the coming weeks.

The court could also be asked to weigh in on another case, developing in a lower court in Texas, that has also blocked the loan program.

A federal judge in Texas on Thursday ruled the student debt forgiveness policy, goes beyond the authority of the Education Department and the power of the executive branch.

U.S. District Judge Mark T. Pittman was appointed by former President Donald Trump, and the lawsuit was brought in October by the conservative Job Creators Network Foundation.

The debt cancellation program was already on hold, unable to discharge any loan payments because of a temporary stay in a federal appeals court that is reviewing a separate lawsuit brought by six conservative states.

A final decision is that case is pending.

If the Supreme Court decides not to overturn the appeals court decision putting the program on pause, the Justice Department asked the Supreme Court to set the case for expedited argument.

ABC News’ Devin Dwyer contributed to this report.

 

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