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Supreme Court to Hear Second Biden's Student Loan Forgiveness Case

Supreme Court

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The nation's highest court is set to hear arguments in a second legal case against the Biden Administration's student loan forgiveness program.

Key Takeaways

  • On Dec. 11, 2022, the Supreme Court of the United States agreed to hear a second set of arguments against the legality of the plan. This comes after an initial court case on the matter was accepted by the Supreme Court on December 1, 2022.
  • Ultimately, this means the Supreme Court will decide if borrowers receive the student loan forgiveness that was promised. In the meantime, payments on most federal student loans are paused and interest rates are still fixed at 0% well into 2023.
  • President Biden's student loan forgiveness plan, which was introduced in August of 2022, aimed to wipe away up to $10,000 in federal student loan debt per eligible borrower, or up to $20,000 in debt per eligible borrower who relied on Pell Grants for school.
  • After the plan's introduction, it met immediate legal challenges that led to a pause in its implementation.

Texas Case Reaches Supreme Court

On Monday, the United States Supreme Court announced it will hold arguments in February on the second case concerning President Biden’s student loan forgiveness program, which was first announced in August. If implemented, Biden's student loan forgiveness plan would forgive up to $10,000 in eligible federal student loans for borrowers who meet the income threshold, or up to $20,000 in federal student loan debt for eligible Pell Grants recipients (the majority of private loans won't be eligible for any forgiveness under this plan).

The original legal case, which was filed in Texas, is between the U.S. Department of Education and two plaintiffs: Myra Brown and Alexander Taylor. The Job Creators Network, arguing on behalf of the defendants, alleged the plaintiffs were unfairly excluded from Biden's program. Brown has federal student loans but isn't eligible for the debt forgiveness since they're not in default, while Taylor is only eligible for $10,000 in student loan debt relief because (due to his parents' financial circumstances at the time) he was ineligible for a Pell Grant while in school.

"Respondents alleged that they were improperly denied the opportunity to comment on the plan and represented that if the Secretary had proceeded through notice and comment, they would have urged him to adopt broader eligibility criteria and to provide greater debt relief," explains the official case application.

The Supreme Court announcement comes after it agreed to oversee a different legal case against Biden's plan on Dec. 1, 2022.

Student Loan Relief Left in the Lurch

The two federal appeals court rulings have halted Biden's student loan forgiveness plan in its tracks. Both cases will be heard by the Supreme Court in February 2023, although a specific date is yet to be announced.

Borrowers with eligible federal student loans still have some temporary relief while they await a decision. Although the Biden Administration previously announced the final extension of the COVID-19 emergency relief for student loans in an August press release, the current pause on payments and fixed 0% interest rate on eligible federal student loans will now continue well into 2023.

"If the debt relief program has not been implemented and the litigation has not been resolved by June 30, 2023 — payments will resume 60 days after that," according to the U.S. Department of Education's website.

Article Sources
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  1. Supreme Court of the United States. "Dept. of Education, Et Al. V. Brown, Myra, Et Al."

  2. The White House. "Fact Sheet: President Biden Announces Student Loan Relief for Borrowers Who Need It Most."

  3. Job Creators Network. "Case 4:22-cv-00908-O," Pages 1–3.

  4. Supreme Court of the United States. "United States Department of Education, Et Al., Applicants v. Myra Brown, Et Al.," Page 3.

  5. Federal Student Aid. "COVID-19 Emergency Relief and Federal Student Aid."