The United States Supreme Court ruled on Thursday to uphold a block of President Joe Biden's student loan forgiveness program and has scheduled arguments for the case for February next year.
The court's brief order did not provide any reasoning for the ruling and did not note any dissents. It acted after the Justice Department filed an emergency application asking Supreme Court justices to lift an injunction issued by the U.S. Court of Appeals for the Eighth Circuit in St. Louis.
Biden's Student Loan Forgiveness Program
Biden's program forgives up to $20,000 in student debt for millions of federal borrowers and has been the center of several legal battles. However, the challenge that was filed by the six states, Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina, is seen as posing the greatest threat.
Officials from the six aforementioned states argued that Biden's proposal exceeds his executive authority and would deprive their territories of future tax revenue. The situation comes as most borrowers have been able to skip payments since March 2020 under a coronavirus relief measure that started under the previous administration and has been repeatedly extended, as per the New York Times.
Last week, the Biden administration also announced the extension of the pause on payments, pushing them back as late as September of next year. There have already been roughly 26 million borrowers who have applied to have some of their student loan debt forgiven under Biden's program.
While the American government has already approved roughly 16 million applications, no debt has actually been canceled yet due to legal challenges. In light of the situation, the Education Department, which owns and manages the government's $1.5 trillion student debt portfolio, has stopped accepting applications.
According to Fox News, another legal challenge that the program struggled with was a case with the 5th U.S. Circuit of Appeals. It was brought by plaintiffs Myra Brown and Alexander Taylor. It was a separate case from the one that the six states filed against Biden's program.
Legal Challenges
Despite the legal challenges, the Biden administration argued that the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 gives the Education Department authority to forgive $10,000 in student loan debt for each borrower under a national emergency.
However, the six states said that the Biden administration used the COVID-19 pandemic as a "false" pretext for the student loan forgiveness program. Officials said that the decision to forgive a portion of borrowers' student loan debt was an "unlawful" abuse of the HEROES Act.
They wrote that the act requires a real connection to a national emergency, arguing that the reliance on the health crisis was only meant to mask Biden's true goal of fulfilling his campaign promise to forgive student loan debt.
Solicitor General Elizabeth Prelogar called the federal appeals court's ruling an "erroneous injunction" that left millions of economically vulnerable borrowers in limbo. It has left them uncertain about the size of their debt and unable to make decisions financially with a level of confidence that they understand their future repayment obligations, CNN reported.
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