Topline
The Biden Administration asked the Supreme Court Friday to take up a second case challenging the White House’s student loan forgiveness policy—a move that won’t result in student debt relief being immediately reinstated, but makes it possible the program could take effect sooner.
Key Facts
The Biden Administration asked the court to consider U.S. Department of Education v. Brown, which blocked the student loan forgiveness program from being implemented after a decision from a federal judge.
The lawsuit was brought by individual borrowers who argue the White House improperly implemented the program because it did not allow for a public comment period before it went into effect.
U.S District Judge Mark Pittman, a Trump appointee, overturned the policy as a result, ruling the Biden Administration exceeded its authority in implementing the program—which the Biden Administration argued he “profoundly erred” by doing, as the judge made his decision based on legal arguments that were never brought up in the initial lawsuit.
The 5th Circuit of Appeals then ruled to keep the loan forgiveness program blocked until it issues a final ruling in the case, prompting the Biden Administration’s Supreme Court appeal.
The Biden Administration is asking the Supreme Court to immediately pause Pittman’s ruling, which means student loan relief could go into effect while the case is being appealed, or else take up the case for oral arguments alongside Biden v. Nebraska, a second lawsuit against the student loan forgiveness brought by GOP-led states that the court will hear in February.
If the Supreme Court pauses Pittman’s ruling while the case is appealed, it won’t put debt relief back into effect immediately, as the White House would need favorable rulings in both this case and the Nebraska case for loan forgiveness to be reinstated.
Debt relief could be reinstated as soon as the Nebraska case is resolved—which will be by June at the latest—rather than after the full appeals process plays out, which could stretch on for even longer.
Crucial Quote
The rulings against student loan forgiveness “leave vulnerable borrowers in untenable limbo,” the Biden Administration argued to the Supreme Court. “Eligible borrowers have been told that they will be able to obtain meaningful debt relief … Yet because of the [rulings], the borrowers most likely to default if payment obligations resume without some relief face prolonged uncertainty about the scope of their payment obligations and when those obligations will resume.”
What To Watch For
It’s unclear when the court could rule on whether or not they’ll take up the case, though its ruling in the other student loan forgiveness policy came relatively quickly. If the Supreme Court decides to hear the Brown and Nebraska cases together, it means a final ruling on student loan forgiveness—which would result in the program either being blocked forever, or being allowed to permanently take effect—will come by the time the Supreme Court’s term wraps up in June. That’s likely to be in time for when the moratorium on student loan repayments is scheduled to end on June 30, after the Biden Administration extended the pause on payments in response to loan forgiveness being blocked.
Big Number
26 million. That’s the number of federal loan borrowers who applied for loan forgiveness before applications for the program were suspended on November 11—more than half of the 43 million total borrowers eligible for relief.
Key Background
The Biden Administration announced in August that it would forgive $10,000 in federal student debt for borrowers earning less than $125,000, or $20,000 in forgiveness for Pell Grant recipients—a move that’s attracted widespread criticism and a slew of litigation from Republicans even as many borrowers have cheered it. The Brown lawsuit was brought by the conservative Job Creators Network on behalf of two borrowers, one of whom has commercially held loans and thus isn’t eligible for forgiveness, while the other was not a Pell Grant recipient and thus is only eligible for $10,000 in relief. The plaintiffs alleged the policy is “irrational, arbitrary, and unfair” in how it excluded them from at least some loan forgiveness, and argued the policy should have been subject to a public comment period. Pittman responded to the lawsuit by striking the policy down entirely, ruling it should have been left up to Congress and the Biden Administration was not justified to forgive debt under the federal law it cited. In its filing to the Supreme Court, the Biden Administration noted that Pittman’s ruling did not actually grant the plaintiffs any relief, because they still can’t comment on the program now that it’s blocked. The ruling actually leaves the plaintiff eligible for $10,000 in relief “worse off than before,” the Biden Administration argued, as “he would receive neither the $10,000 the plan provides nor the $20,000 he seeks, but instead nothing at all.”
Further Reading
Supreme Court Will Hear Arguments On Biden’s Stalled Student Loan Forgiveness Plan (Forbes)
Follow me on Twitter. Send me a secure tip.