On Friday, Nov. 5, U. S. Supreme Court Justice Amy Coney Barrett declined to stop President Joe Biden’s cancellation of $1.2 billion dollars in federal student loan funds for students attending private institutions.
According to a Reuters report, Barrett denied an emergency appeal by the Indiana students, who were backed by a conservative legal group representing them, to block the Biden administration’s plan to forgive student loan debts.
Barrett ruled against a similar motion filed by a Wisconsin taxpayers association on Oct. 20. She did so because she was the judge who had been asked to handle an emergency petition for review filed by several states including Indiana and Wisconsin.
On Hold in October
The St. Louis-based 8th U.S. Circuit Court of Appeals on Oct. 21 put the policy on hold in yet another conservative challenge by six Republican-led states while it considered their request for an injunction pending the appeal of their case’s dismissal. That request remains pending.
Background of the Plan
Biden’s plan, announced in August, aims to cancel up to $10,00 in federal loans for borrowers earning less than $125, 000 annually, or $250, 000 for married couples. Students receiving Pell grants to help low-income students attend school would get up to $20, 000 of their loans forgiven, according to Reuters.
The nonpartisan Congressional Budget Office estimated that student debt relief would eliminate about $430bn of the $1.6 trillion in outstanding student loans and that more than 40 million people would benefit from the program.
The policy fulfills a commitment Biden promised during his presidential campaign to help debt-burdened former college graduates. Democrats hope the policy helps their chances in Tuesday’s midterms where they need to win back control of Congress, according to the Reuters report.
On Friday, the U.S. Supreme Court heard arguments from two groups representing two borrowers who claim that they would suffer “irreparable harm” if Congress’ plan to forgive certain federal student loan debt goes into effect.
Soon after they sued, the Department of Education created an opt-out option for borrowers. U.S. District Judge Richard Young on Oct. 21 dismissed the case, finding that the debt forgiveness program did not injure them.
The Chicago-based 7th U.S. Circuit Court of Appeals on Oct. 28 declined to block the plan while the borrowers pursued an appeal, noting that the program is “not compulsory” and that the plaintiffs could avoid tax liability simply by opting out.
Caleb Kruckenberg, a lawyer at the Pacific Legal Foundation, in a statement, expressed disappointment that Barrett declined to block the plan. At the same time, his clients pursued their appeal but said they will “continue to fight this program in court.”
“Practically since this program was announced, the administration has sought to avoid judicial scrutiny,” he said. “Thus far they have succeeded. But that does not change the fact that this program is illegal from stem to stern.”