EDUCATION

Judge denies attempt to block student loan forgiveness from taking effect

Oct 20, 2022, 5:20 PM
College Costs...
(Photo: iStockPhoto.com)
(Photo: iStockPhoto.com)
Originally Published: 20 OCT 22 17:25 ET
Updated: 20 OCT 22 18:58 ET

(CNN) — Supreme Court Justice Amy Coney Barrett rejected a challenge to the Biden administration’s student loan forgiveness program on Thursday, declining to take up an appeal brought by a Wisconsin taxpayers group.

The order is a win for President Joe Biden for now, though there are other challenges in the pipeline making their way up to the high court.

Utah leaders respond to President Biden’s student loan forgiveness plan

Student loan cancellations, worth up to $20,000 per eligible borrower, could begin on Sunday.

The appeal at issue was considered an uphill battle because lower courts had ruled that the group, the Brown County Taxpayers Association, did not have the legal right or “standing” to bring the challenge. Under normal circumstances, taxpayers don’t have a general right to sue the government over how it uses taxpayer funds.

Barrett acted alone because she has jurisdiction over the lower court that ruled on the case. She declined to refer the matter to the full court. Her denial appeared as a single sentence on the court’s docket.

Other legal challenges

A federal district court judge rejected a separate lawsuit brought by six Republican-led states Thursday, also because the plaintiffs did not have the legal standing to bring the challenge.

The plaintiffs in that case had asked a federal judge to put student loan cancellation on hold until issuing a final ruling on the case.

Utah leader says student loan forgiveness plan will hurt everybody

The states are expected to immediately appeal. That would send the case to the 8th Circuit Court of Appeals, where it is likely to face a panel of conservative judges.

The Biden administration is also facing lawsuits from Arizona Attorney General Mark Brnovich, and conservative groups such as the Job Creators Network Foundation and the Cato Institute.

Many of the legal challenges claim that the Biden administration does not have the legal authority to broadly cancel student loan debt.

Lawyers for the government argue that Congress gave the secretary of education the power to discharge debt in a 2003 law known as the HEROES Act.

The Biden administration’s program

Biden’s student loan forgiveness program, first announced in August, aims to deliver debt relief to millions of borrowers before federal student loan payments resume in January after a nearly three-year, pandemic-related pause.

While the application officially opened on Monday, the Biden administration has agreed in court documents to hold off on canceling any debt until October 23. Once processing begins, most qualifying borrowers are expected to receive debt relief within weeks.

Sen. Romney introduces bill to prevent cancellation of student loans

Under Biden’s plan, eligible individual borrowers who earned less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 annually in those years will see up to $10,000 of their federal student loan debt forgiven.

If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness.

This story has been updated with additional information.

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