High court to rule on Biden student loan cancellation plan - Albuquerque Journal

High court to rule on Biden student loan cancellation plan

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.

Home » Business » Money » High court to rule on Biden student loan cancellation plan

Insert Question Legislature form in Legis only stories




Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

ABQjournal can get you answers in all pages

 

Questions about the Legislature?
Albuquerque Journal can get you answers
Email addresses are used solely for verification and to speed the verification process for repeat questioners.
1
Lots of sound and fury on US debt, but ...
Money
WASHINGTON (AP) -- For all the ... WASHINGTON (AP) -- For all the sound and fury about raising the nation's debt limit, most economists say federal borrowing is not at a ...
2
Asian shares mixed on hopes for avoiding recession
Money
BEIJING (AP) -- Asian stock markets ... BEIJING (AP) -- Asian stock markets were mixed Thursday amid hopes Western economies can avoid a recession despite higher interest rates to cool inflation. ...
3
Budget proposal concerns NM water official
ABQnews Seeker
With a call for increased spending ... With a call for increased spending on water-related projects, but no more staff, it will be a struggle to carry out projects
4
Heinrich: $774K going to small business efforts
ABQnews Seeker
Federal funds from Omnibus Appropriations Agreement Federal funds from Omnibus Appropriations Agreement
5
Google axes 12,000 jobs as layoffs spread across tech ...
Money
LONDON (AP) -- Google is laying ... LONDON (AP) -- Google is laying off 12,000 workers, or about 6% of its workforce, becoming the latest tech company to trim staff as ...
6
Asian markets rise after Wall St losses amid recession ...
Money
BEIJING (AP) -- Asian stock markets ... BEIJING (AP) -- Asian stock markets rose Friday after Wall Street losses deepened as worries grow that the U.S. economy is headed for recession. ...
7
Wholesale inflation in US slowed further in December to ...
Money
WASHINGTON (AP) -- Wholesale prices in ... WASHINGTON (AP) -- Wholesale prices in the United States rose 6.2% in December from a year earlier, a sixth straight slowdown and a hopeful ...
8
Asian shares decline as Bank of Japan keeps policy ...
Journal North Recent News
BANGKOK (AP) -- Asian shares were ... BANGKOK (AP) -- Asian shares were mostly lower Wednesday after Japan's central bank kept its lax monetary policy unchanged, contrary to speculation it would ...
9
Afterpay's out. What's next for 'buy now, pay later' ...
ABQnews Seeker
Despite the growing popularity of "buy ... Despite the growing popularity of "buy now, pay later" services, there are fewer options ...