News

Biden Administration Defends Student Loan Cancellation at Supreme Court

WASHINGTON — The Biden administration asked the Supreme Court on Wednesday to uphold its decision to forgive hundreds of billions of dollars of student loan debt for tens of millions of Americans, arguing that it was acting within its executive authority and did not need new congressional authorization.

In a brief filed with the justices, the Justice Department rejected legal challenges mounted by a half-dozen Republican-led states and maintained that the states did not have a basis for contesting the decision in court in the first place.

The administration’s response to the challenges came a month after the court agreed to hear the matter and put the case on an expedited timetable. The justices plan to hear arguments in February and left in place an injunction issued by a lower court blocking the administration from proceeding with the program until the legal questions have been resolved.

The program would forgive as much as $20,000 in debt for as many as 40 million borrowers making under $125,000 a year. More than 16 million potential beneficiaries have already been approved for the relief if the court allows the program to proceed, and millions more have applied. The administration said that nearly 90 percent of the benefits would go to borrowers who had already finished school and were making less than $75,000 a year.

President Biden’s decision to offer the forgiveness represented one of the most sweeping spending decisions ever initiated by a president without a specific congressional vote. The nonpartisan Congressional Budget Office has estimated its cost at around $400 billion over 30 years, with the bulk of the effects to the economy over the next decade.

The states challenging the decision — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — maintain that the administration did not have the power to authorize such an expansive move on its own and argue that it would deprive the states of future tax revenue.

“The administration is once again invoking the Covid-19 pandemic to assert power far beyond anything Congress could have conceived,” the states said in a brief filed with the Supreme Court in November, noting that the justices had previously ruled against two other Covid-related measures. “Now,” they added, “while President Biden publicly declares the pandemic over, the secretary and Department of Education are using Covid-19 to justify the mass debt cancellation.”

Most borrowers have already been able to skip student loan payments for nearly three years under a Covid-19 relief measure initiated under President Donald J. Trump in March 2020 and continued under Mr. Biden. Mr. Biden’s administration has extended the suspension of payments until as late as September.

The Biden team’s legal brief filed on Wednesday contended that the pandemic also provided the grounds for the debt cancellation program, arguing that the administration had the authority under the Heroes Act of 2003, which allows the secretary of education to grant relief during times of war or national emergency.

“The secretary’s actions fall comfortably within the plain text of the act,” the brief said, referring to Education Secretary Miguel A. Cardona.

The brief also challenged the states’ right to sue over the program. The U.S. Court of Appeals for the Eighth Circuit, which imposed the injunction temporarily halting the forgiveness pending legal resolution, focused on the possibility of harm to the Missouri Higher Education Loan Authority, a nonprofit entity that services federal loans.

But the administration brief argued that the authority is separate from the State of Missouri and that any harm is highly speculative. The brief also said two borrowers who sued in Texas, represented by a special interest group, did not have standing to challenge the program.

The student loan plan may have played a role in bolstering Democrats in November’s midterm elections. While voters as a whole split relatively evenly on the matter, with 50 percent supporting it and 47 percent opposing it, according to CNN exit polls, the program had far higher support among younger voters, who broke decisively for Democrats.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button