Supreme Court Agrees to Hear Arguments in Student Loan Debt Cancellation Plan While Another Appeals Court Upholds Block

The Supreme Court yesterday agreed to hear arguments this term in a lawsuit over the Biden administrations plan to cancel up to $20,000 of student loan debt, while another appeals court issued a ruling upheld a lower court’s decision to temporarily halt the program, after 26 million individuals had applied for loan forgiveness.

Arguments in the case have been scheduled for February, which means a ruling will come before the Supreme Court’s current session ends in May. Until then, the program will likely remain on hold.

In August, the Biden administration announced a plan to forgive $10,000 of student loan debt — up to $20,000 if Pell grants were involved — for anyone making less than $125,000 per year. The plan was expected to wipe out at least some, if not all, of the unpaid student loans for about 40 million individuals. More than 26 million people filed applications for relief, but a number of lawsuits were filed seeking to block the plan from going into effect.

The government has extended the moratorium on student loan payments through at least the end of June next year.

The case before the Supreme Court was filed by six states — led by Republicans — who claimed the program was unlawful because the president exceeded his authority by taking action without first obtaining congressional approval.

It’s worth noting that the Supreme Court has put the kibosh on a number of programs and initiatives started by the Biden administration, such as a moratorium on evictions during the COVID-19 pandemic, a requirement that large employers implement measures to either test employees or require them to be vaccinated against COVID-19, and overhauling immigration policies.

Meanwhile, the Court of Appeals for the Fifth Circuit yesterday upheld a lower court’s ruling that blocked the student loan forgiveness program. The claim in that case was that the public was denied the opportunity to comment on the plan before it was put into action. It is possible that the two cases will be combined and both argued before the Supreme Court at the same time.

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