Group Asks Supreme Court To Halt Biden’s Student Loan Forgiveness Plan

Topline

A Wisconsin taxpayers association asked the Supreme Court Wednesday to block the White House’s student loan forgiveness program before funds start rolling out to borrowers later this month, one of several legal challenges that threatens President Joe Biden’s student debt proposal—though a lower court has already rejected the group’s claims.

President Joe Biden delivers remarks regarding student loan debt forgiveness at the White House with … [+] Education Secretary Miguel Cardona on August 24.

The Washington Post via Getty Images

Key Facts

The Brown County Taxpayers Association asked the Supreme Court to immediately block Biden’s student loan program while the group’s litigation against it proceeds, arguing the Biden Administration exceeded its authority and violated the Administrative Procedure Act when it imposed the loan forgiveness policy.

The request argues the program will result in a “gargantuan increase in the national debt” that will result in taxpayers “being asked to assume perhaps over one trillion dollars in debt,” and that such large spending measures should only be taken by Congress and not the executive branch.

A lower district court has already denied the request to block the program, ruling that the taxpayers did not have standing to bring it because if taxpayers could simply challenge any move by the federal government that they opposed, “the federal courts would cease to function as courts of law and would be cast in the role of general complaint bureaus.”

The 7th Circuit Court of Appeals also rejected the taxpayers’ request to block the forgiveness policy while they appealed the case, though it did not explain its rationale for doing so.

The taxpayers argued to the Supreme Court that they should be allowed to sue the Biden Administration and have standing because they are harmed by the program and it “tramples the constitutional spending power.”

The White House has not yet responded to a request for comment.

Crucial Quote

“It simply cannot be the law that a President can hand out a trillion dollars with impunity,” the taxpayers argued to the Supreme Court.

What To Watch For

A ruling is likely to come quickly, as taxpayers noted to the court that the Biden Administration could start dispensing relief funds to borrowers as soon as Sunday and have asked the court to block the program before it can do so.

Tangent

The lawsuit is one of multiple pending cases challenging the student loan forgiveness program. A ruling on whether or not to block the program is also expected in the coming days in a separate case brought by Republican-led states, which is now pending in a lower court in Missouri.

Big Number

More than 12 million. That’s the number of federal student loan borrowers that have already applied for forgiveness. The White House said 8 million people applied over the weekend after applications opened for a beta test before officially launching on Monday, and Biden said Tuesday an additional 4 million borrowers had then applied for relief just in the first day since applications formally opened. Borrowers can apply online to receive debt forgiveness through December 23.

Key Background

The Biden Administration plans to forgive up to $10,000 in federal student loan debt for all borrowers earning less than $125,000 per year, or $20,000 in debt relief for people who have received federal Pell grants. To justify the program, the Biden Administration has pointed to the federal HEROES Act, which allows the Education Secretary to modify or waive student aid during national emergencies, arguing the debt relief is a necessary step amid the Covid-19 pandemic. The White House announced the policy in August after months of speculation over whether Biden would forgive some debt, and applications started rolling out on Friday after initially getting slightly delayed by the ongoing litigation. The lawsuits brought by the Wisconsin taxpayers and the GOP-led states are part of a broader opposition on the right to the forgiveness policy, which the Congressional Budget Office has estimated will cost approximately $400 billion.

Surprising Fact

In his order striking the Wisconsin taxpayers’ lawsuit down, U.S. District Judge William Griesbach noted that if the plaintiffs are right and the Biden Administration did exceed its authority by forgiving student debt (which his ruling didn’t weigh in on), it’s possible that a future presidential administration could simply void the debt relief and force borrowers to pay back the funds the Biden Administration forgave. No Republicans have so far spoken out in favor of doing that if the GOP regains control of the White House, so it’s unclear if that would ever actually happen, but Griesbach noted borrowers “may wish to consider this possibility before placing undue reliance on the benefits promised.”