President Biden’s far-reaching initiative to forgive student loan debt will be debated this week before a Supreme Court that is skeptical of the administration’s bold claims of power—a nearly half-trillion-dollar showdown that could affect more than 40 million Americans.
Next month, the Supreme Court will hear oral arguments in two cases seeking to overturn the debt relief policy that conservatives have panned as an expensive giveaway and executive overreach.
President Joe Biden is moving forward with the repayment plan even as his one-time debt cancellation faces an uncertain fate before the Supreme Court.
The U.S. Supreme Court has expanded a planned showdown over President Joe Biden’s student-loan relief plan, saying it will hear arguments from two borrowers who contend they are being unfairly excluded from the full scope of the program.
Wednesday’s ruling by a three-judge panel of the New Orleans-based court is the latest blow to a plan that has been shadowed by legal doubt since President Joe Biden announced it in August.
The future of President Biden’s student loan forgiveness program remains in doubt after a federal appeals court issued an injunction preventing the government from discharging any debt while it considers a lawsuit to end the policy.
A U.S. judge on Thursday blocked President Joe Biden’s plan to provide millions of borrowers with up to $20,000 apiece in federal student-loan forgiveness.
Attorneys for six Republican-led states are asking a federal appeals court to reconsider their effort to block the Biden administration’s program to forgive billions of dollars in student loan debt.
Earlier Thursday, Supreme Court Justice Amy Coney Barrett rejected an appeal from a Wisconsin taxpayers group seeking to stop the debt cancellation program.
The new suit is one of a growing number of legal challenges against the proposal laid out by President Joe Biden in late August to cancel up to $20,000 in debt for certain borrowers.
Hundreds of thousands of borrowers could be shut out of the student debt relief promised by President Biden after the Education Department announced Thursday that privately held loans will not be forgiven.
The lawsuit was filed in federal court in Indiana, one of several states that plan to tax any student debt canceled by President Biden’s plan.
The new cost estimate will add fresh fuel to the debate over President Joe Biden’s decision to cancel up to $20,000 in student debt for eligible borrowers.
Most of those Indiana recipients could have up to $20,000 forgiven because they received Pell Grants, which are provided to students whose families can’t help them pay for college.
Democratic state Rep. Rep. Greg Porter of Indianapolis condemned the policy in a statement Tuesday and said he was drafting legislation to retroactively eliminate state income tax on debt relief.
The Education Department has offered to return money to people who continued to pay since the inception of the moratorium in March 2020, but the policy went largely unnoticed until last week.
Fissures opened instantly within the Democratic Party, as moderates said Biden was doing too much and liberals demanded he do more, while Republicans lined up in adamant opposition to the debt-forgiveness plan.
The plan calls for $10,000 or more in federal loan forgiveness for millions of Americans. Democrats are betting that President Joe Biden, who has seen his public approval tumble over the past year, can help motivate younger voters to the polls with the announcement.
The plan, expected to be revaled Wednesday, would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more.
The group estimated that between 69% and 73% of any debt forgiven would accrue to households that rank in the top 60% of the U.S.’s income distribution.
