The ruling comes days after a federal judge in a separate trial in Texas declared Biden’s debt relief plan illegal, effectively preventing the Department of Education from accepting more applications and paying off any debt. This week, Justice Department attorneys asked the United States Court of Appeals for the 5th Circuit to stay the decision in the Texas case and asked the court to issue a ruling by May 1. December “to allow the government to seek redress from the Supreme Court” if necessary. .
U.S. Solicitor General Elizabeth B. Prelogar told the Supreme Court that if she chooses not to lift the 8th Circuit injunction, she should “specify arguments for expedited briefing and argument this term to to avoid prolonging this uncertainty for the millions of borrowers concerned”.
The Supreme Court on Friday asked states to file a response by noon Wednesday.
Biden loan relief plan would cancel up to $10,000 in federal student debt for borrowers earning up to $125,000 a year, or up to $250,000 for married couples. Those who received Pell Grants are eligible for an additional rebate of $10,000. To date, more than 26 million people have applied for Biden’s debt relief package, and 16 million of those applications have been reviewed, according to the education department.
The Department of Justice issued a 25 page memo it says the program is authorized by a 2003 law that authorizes the Secretary of Education “to mitigate hardship that federal student loan recipients may experience due to national emergencies.”
But Republican-led states and other opponents of the program argue that the scale of loan forgiveness, at a cost of about 300 billion dollars over 10 years, justifies authorization by Congress because of its economic and political importance.
The lawsuit was filed by six states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – which sued the administration in September. The states accuse the president of overstepping his authority and threatening the revenues of state entities that profit from federal student loans.
The 8th Circuit’s ruling suspended the program while those legal arguments continue. The deal is Biden v. State of Nebraska, et al.