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Supreme Court Rejects Emergency Challenge to Biden’s Student Loan Forgiveness Plan

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Supreme Court Rejects Emergency Challenge to Biden’s Student Loan Forgiveness Plan
The U.S. Supreme Court Building in Washington on Oct. 3, 2022. (Anna Moneymaker/Getty Images)
Caden Pearson
10/20/2022
Updated:
10/21/2022

Supreme Court Justice Amy Coney Barrett on Thursday rejected an emergency challenge by a group of Wisconsin taxpayers to the Biden administration’s student loan forgiveness program.

In a one-sentence order, Barrett denied the request, preventing it from going to the full bench. Barrett has jurisdiction over the lower court that ruled on the case.

The Brown County Taxpayers Association urged the court on Wednesday to block President Joe Biden’s national debt cancellation plan, saying it is illegal and encroaches on Congress’s exclusive spending power.

A U.S. district judge in Wisconsin had previously ruled that the legal challenge lacked standing. A bid to halt the ruling while a formal appeal plays out was rejected by an intermediate appeals court. This prompted the failed Supreme Court appeal bid.

With the lower court’s order intact, student loan forgiveness of up to $20,000 per borrower could begin on Sunday. The Congressional Budget Office has estimated it will cost about $400 billion over 30 years.

In August, Biden announced the plan to cancel $10,000 in federal student loan debt for borrowers earning under $125,000 annually and $20,000 for recipients of Pell grants, which help students from lower-income families.

Borrowers who have federal student loans owned by private entities and not by the Department of Education will no longer qualify for the relief program, according to an update on Sept. 29.

The program will allow tens of millions of Americans to apply for student loan cancellation. Borrowers have until Dec. 31, 2023, to submit an application.

In their lawsuit, the Brown County Taxpayers Association argued the White House lacks the constitutional power or Congressional authorization to enact the program.

Over 8 Million Applications Received

Over 8 million borrowers had already applied for loan forgiveness as of Monday through the beta version of the website, according to the White House.
Biden announced the launch of the official application site at StudentAid.gov on Monday after a “beta” test version of the site was rolled out over the weekend.

“Today, I’m announcing millions of people, working and middle-class folks, can apply to get this relief. And it’s simple and it’s easy, it’s fast,” Biden said.

“You’ll be able to fill out your name, Social Security number, date of birth, and contact information. No forms to upload. No special log-in to remember. It’s available in English and in Spanish, on desktop and mobile.”

Republican-led states and business groups have filed lawsuits against the $400 billion loan forgiveness plan, which comes amid soaring inflation. Some argue the program is counterproductive, inflationary, and violates the Administrative Procedure Act’s notice-and-comment procedures through which the administration should have sought the public’s input or comment on the program.

Other challenges to the program are expected to make their way to the Supreme Court.