US Supreme Court weighs Biden’s college student debt relief | Business and Economy News

Joe Biden wants to forgive student debt for millions with education loans, but critics argue he overstepped his authority.

The fate of US President Joe Biden’s plan to cancel $430bn in student debt for 40 million borrowers is in the hands of the Supreme Court in a case that presents another major test of executive branch authority in the United States.

The nine justices are to hear arguments on Tuesday in the Biden administration’s appeal of two lower court rulings blocking the policy that he announced in August. The legal challenges were brought by six conservative-leaning states and two student loan borrowers opposed to the plan’s eligibility requirements.

Under the president’s plan, the US government would forgive up to $10,000 in federal student debt for Americans making under $125,000 who took out loans to pay for college and other post-secondary education. That amount would go up to $20,000 for recipients of Pell grants awarded to students from lower-income families.

The programme fulfilled Biden’s 2020 campaign promise to cancel a portion of the nation’s $1.6 trillion in federal student loan debt but was criticised by Republicans as an overreach of his authority.

The policy, intended to ease the financial burden on debt-saddled borrowers, could face scrutiny by the court under the so-called major questions doctrine. Its 6-3 conservative majority has employed this muscular judicial approach to invalidate Biden policies that it said lacked clear congressional authorization.

Biden’s administration has said the plan is authorised under a 2003 federal law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, which allows student loan debt relief during wartime or national emergencies.

Many borrowers experienced financial strain during the COVID-19 pandemic, a declared public health emergency. Beginning in 2020, the administrations of President Donald Trump, a Republican, and Biden, a Democrat, repeatedly paused federal student loan payments and halted interest from accruing, relying upon the HEROES Act to do so.

Biden’s administration contends that the challengers have not suffered the sort of legal injury needed to give them the proper standing to bring their lawsuits. The challengers have said the Biden administration failed to provide an adequate legal underpinning for the programme.

Student debt relief advocates gather outside the Supreme Court on Capitol Hill in Washington
Protesters rally for student debt relief outside the US Supreme Court ahead of arguments over President Joe Biden’s student debt relief plan [Patrick Semansky/AP Photo]

In the legal challenge brought by individual borrowers Myra Brown and Alexander Taylor, Texas-based US District Court Judge Mark Pittman ruled the student loan forgiveness programme lacked “clear congressional authorization”. The New Orleans-based 5th US Circuit Court of Appeals declined to put Pittman’s decision on hold pending an appeal.

Missouri-based US District Court Judge Henry Autrey found the states Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina lacked the legal standing to sue. On appeal, the St. Louis-based 8th US Circuit Court of Appeals found at a minimum that Missouri likely had standing to sue and that court temporarily blocked the Biden programme from taking effect while the case proceeded.

One theory of legal standing advanced by the states is that Biden plan’s would harm a Missouri-based student loan servicer, a company involved in collecting payments, which in effect would injure that state.

The two individual borrowers have said the administration’s failure to allow public comment over Biden’s student debt forgiveness plan deprived them of “procedural rights” under federal law.

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