A single justice of the U.S. Supreme Court has denied another request to block Biden’s student loan forgiveness plan. While this may come as good news for borrowers, the program remains stalled due to a separate court order associated with a different legal challenge.
Here’s the latest.
Supreme Court Justice Declines to Block Biden’s Student Loan Forgiveness Plan
Supreme Court Justice Amy Coney Barrett on Friday declined to accept a legal challenge to President Biden’s student loan forgiveness plan. Under his plan, up to 40 million borrowers can receive $10,000 or more in student loan forgiveness if their income was under certain limits in either of the last two years. Only federal student loans administered by the government are eligible.
The case is an appeal from a lower-court ruling in Indiana. A conservative legal group had argued that Biden’s student loan forgiveness program harmed Indiana taxpayers. A federal district court had rejected their arguments and dismissed the case, concluding that the Plaintiffs did not have standing. They ultimately appealed to the U.S. Supreme Court, but Justice Barrett rejected the challenge.
Barrett had rejected a similar appeal brought by other challengers from Wisconsin last month.
Federal Appeals Court Order Temporarily Halting Biden’s Student Loan Forgiveness Program Remains in Place
The impacts of today’s Supreme Court action are blunted, however by the ongoing block on Biden’s student loan forgiveness plan enacted by the 8th Circuit Court of Appeals.
In that case, a coalition of Republican-led states filed a lawsuit arguing that implementation of Biden’s loan forgiveness plan will negatively impact state revenues. Their arguments were rejected by a federal district court judge, but the states then appealed to the 8th Circuit. In response, the 8th Circuit imposed a temporary administrative stay while it considers whether to impose a more lasting preliminary injunction. That temporary stay remains in effect until that court issues a ruling, despite the Supreme Court’s decision in the other matter.
There is speculation that the 8th Circuit may be waiting until after the midterm elections to issue a ruling. The losing party may ultimately appeal that ruling to the Supreme Court — so ultimately, the nation’s highest court may still weigh in on Biden’s student loan forgiveness plan, one way or another.
Education Department Is Still Accepting Student Loan Forgiveness Applications
Despite the legal wrangling, the Education Department is still accepting applications for Biden’s student loan forgiveness plan. Over 26 million borrowers have already applied, according to President Biden in remarks earlier this week, and 16 million borrowers have already been approved for loan forgiveness. But the Education Department cannot implement any loan forgiveness while the 8th Circuit’s temporary stay remains in effect.
“That relief is on hold… because Republican elected officials are doing everything they can to deny it, even to their own constituents,” said Biden on Thursday.
Biden predicted earlier that the administration will ultimately prevail in the litigation.