The Biden administration is asking the Supreme Court to allow the student loan relief plan to go forward



CNN

Biden administration The question was raised in the Supreme Court on Friday Amid legal challenges across the country to allow its controversial student loan relief program to go into effect.

The The program promises to provide loan relief up to $20,000 to millions of borrowers, but has been put on hold as lower courts have blocked it nationwide.

About 26 million people had already applied for the program by the time a federal judge blocked it on Nov. 10, prompting the government to stop taking applications. No loan has been canceled so far.

The federal appeals court’s “misguided injunction,” Solicitor General Elizabeth Preloger told the Supreme Court, “left millions of economically vulnerable borrowers uncertain about the extent of their debt and unable to make financial decisions with an accurate understanding of their future repayment obligations.”

Government lawyers say President Joe Biden acted to address the financial impacts of the pandemic and “smooth the transition to repayment” by offering targeted loan relief to some federal student-loan borrowers affected by the pandemic.

Payments on federal student loans are scheduled to resume in January after a multi-year pandemic pause.

This scheme is designed to help borrowers. The program will provide student loan debt relief of up to $10,000 to eligible borrowers with less than $125,000 ($250,000 for a family) once loan cancellation begins.

Additionally, borrowers who receive a Pell Grant can receive up to $20,000 in relief.

The administration says the authority is under the Higher Education Relief Opportunities for Students Act of 2003, or the HEROES Act. It argues that the statute exempts the government from applicable procedural requirements, including the creation of a notice and comment rule.

“Because borrowers who default on their student loans face severe financial consequences — including wages, long-term credit damage and ineligibility for federal benefits — Congress specifically authorized the Secretary to waive or modify any applicable statutory or regulatory provisions. Borrowers affected by a national emergency may be adversely affected by their student loans. Confirm no,” the prelogger filed Friday.

The dispute was brought by a group of states led by Nebraska that contend the student loan debt relief program violates the Separation of Powers and Administrative Procedure Act, a federal law that governs the process by which federal agencies issue regulations.

A district court said states lacked the legal right or “standing,” but the 8th US Circuit Court of Appeals issued a nationwide injunction blocking the program. It relied on the “irreversible impact” that loan forgiveness would have and would stop student loan payments and interest accruals on student loans when there are legal challenges.

Two individual borrowers, Myra Brown and Alexander Taylor, are ineligible for full loan relief and have a separate challenge in federal courts that say they were denied an opportunity to comment on the Secretary of Education’s decision to grant targeted students. Loan waiver for some.

This story has been updated with additional details.

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