The Supreme Court agrees to hear a 2nd student-loan forgiveness case next year to decide millions of borrowers' fates
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- The Supreme Court agreed to hear a second challenge to President Joe Biden's student-debt relief.
- The challenge was brought by two student-loan borrowers who didn't qualify for the full amount of relief.
- Oral arguments will be heard in February, alongside a separate case that also blocked the debt cancellation.
The Supreme Court will soon decide the fate of President Joe Biden's student-loan forgiveness plan — and that of millions of federal borrowers.
On Monday, the nation's highest court agreed to hear a second challenge early next year to Biden's program, which is currently on hold. The case was brought by two student student-loan borrowers — Myra Brown and Alexander Taylor — who sued the Biden administration because they did not qualify for the full $20,000 in relief that the president announced at the end of August.
A federal judge in Texas, appointed by former President Donald Trump, granted the borrowers' request and blocked the implementation of the debt relief in November. While Biden's Justice Department appealed the decision, the US Court of Appeals for the 5th Circuit declined to reinstate the plan. The department took matters to the Supreme Court, asking it to make the final ruling on the legality of the debt relief.
According to the Supreme Court filing, it is asking for both parties to address these two questions: whether the plaintiffs in the case have standing, and whether Biden's debt relief was implemented in a "procedurally proper manner."
In the meantime, the justices refused to lift the hold on the relief, as US Solicitor General Elizabeth Prelogar had requested. The Education Department is not currently able to accepting applications for the plan that would cancel $10,000 for federal borrowers earning less than $125,000 and $20,000 for Pell Grant recipients earning less than $125,000.
Oral arguments on the dispute will take place in February, joining another case concerning Biden's program. The Supreme Court earlier this month already agreed to take up a separate challenge brought by six Republican-led states that argued the loan forgiveness would hurt their states' tax revenues. The US Court of Appeals for the 8th Circuit, which temporarily halted the relief in October, ruled in November that the pause will remain in place, prompting the Biden administration to ask the highest court to make the final ruling.
The questions the Supreme Court will review in that case are whether the GOP-led states have standing, and whether the debt relief exceeds the Education Secretary's authority or is "arbitrary and capricious."
The Biden administration has consistently maintained that it has the authority to enact its one-time student-loan forgiveness using the HEROES Act of 2003, which gives the Education Secretary the ability to waive or modify student-loan balances in connection with a national emergency, such as COVID-19. But in light of the lawsuits, Biden announced an extension of the student-loan payment pause through June 30 at the latest, or until the lawsuits are resolved — whichever comes first.
Payments were previously scheduled to resume after December 31, but Biden said that it "isn't fair that tens of millions of borrowers that are eligible for relief to resume their student debt payments while the courts consider the lawsuit."
The Supreme Court is expected hand down decisions in both cases by next June.
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