The ruling arrives days after a federal judge in a separate lawsuit in Texas declared Biden’s debt relief plan unlawful, effectively barring the Education Department from accepting more applications and discharging any debt. This week, Justice Department attorneys asked the U.S. Court of Appeals for the 5th Circuit to stay the ruling in the Texas case and asked the court for a ruling by Dec. 1 “to allow the government to seek relief from the Supreme Court” if needed.
U.S. Solicitor General Elizabeth B. Prelogar told the Supreme Court that if it chooses not to lift the 8th Circuit’s injunction, it should “set the case for expedited briefing and argument this term to avoid prolonging this uncertainty for the millions of affected borrowers.”
The Supreme Court on Friday asked the states to file a response by noon Wednesday.
Biden’s loan relief plan would cancel up to $10,000 in federal student debt for borrowers earning up to $125,000 annually, or up to $250,000 for married couples. Those who received Pell Grants are eligible for an additional $10,000 in forgiveness. To date, more than 26 million people have applied for Biden’s debt relief program, and 16 million of those files have been reviewed, according to the education department.
The Justice Department released a 25-page memo that says the program is authorized by a 2003 law that authorizes the education secretary “to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.”
But Republican-led states and other opponents of the program argue that the scale of loan cancellation, at a cost of about $300 billion over 10 years, warrants congressional authorization because of the economic and political significance.
The lawsuit was filed by six states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — that sued the administration in September. The states accuse the president of overstepping his authority and threatening the revenue of state entities that profit from federal student loans.
The 8th Circuit decision put the program on hold while those legal arguments proceed. The case is Biden v. State of Nebraska, et al.