Supreme Court to Hear Student Debt Forgiveness Case
WASHINGTON — The Supreme Court agreed on Thursday to decide whether the Biden administration had overstepped its authority with its plan to wipe out billions of dollars in student debt.
The justices put the case on an unusually fast track, saying they would hear arguments in February. In the meantime, though, they left in place an injunction blocking the program.
The court’s brief order gave no reasons and did not note any dissents.
The court acted after the Justice Department filed an emergency application asking the justices to lift the injunction, which had been issued by the U.S. Court of Appeals for the Eighth Circuit, in St. Louis, at the request of six Republican-led states.
The program, which forgives up to $20,000 in debt for millions of federal borrowers, has set off a flurry of legal battles, but the one filed by the six states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina — may represent the most serious threat. The states have said that Mr. Biden’s proposal exceeds his executive authority and would deprive them of future tax revenue.
Since March 2020, most borrowers have been able to skip payments under a coronavirus relief measure that began under President Donald J. Trump and was extended multiple times, including under President Biden. Last week, the Biden administration again extended the pause on payments, pushing them until as late as September.
What to Know About the Trump Investigations
Numerous inquiries. Since leaving office, former President Donald J. Trump has been facing several investigations into his business dealings and political activities. Here is a look at some notable cases:
Classified documents inquiry. The F.B.I. searched Mr. Trump’s Florida home as part of the Justice Department’s investigation into his handling of classified materials. The inquiry is focused on documents that Mr. Trump had brought with him to Mar-a-Lago, his private club and residence, when he left the White House.
Jan. 6 investigations. In a series of public hearings, the House committee investigating the Jan. 6 attack laid out a comprehensive narrative of Mr. Trump’s efforts to overturn the 2020 election. This evidence could allow federal prosecutors, who are conducting a parallel criminal investigation, to indict Mr. Trump.
Georgia election interference case. Fani T. Willis, the Atlanta-area district attorney, has been leading a wide-ranging criminal investigation into the efforts of Mr. Trump and his allies to overturn his 2020 election loss in Georgia. This case could pose the most immediate legal peril for the former president and his associates.
New York State’s civil case. Letitia James, the New York attorney general, has accused Mr. Trump, his family business and his three adult children of lying to lenders and insurers, fraudulently inflating the value of his assets. The allegations, included in a sweeping lawsuit, are the culmination of a yearslong civil investigation.
Manhattan criminal case. Alvin L. Bragg, the Manhattan district attorney, has been investigating whether Mr. Trump or his family business intentionally submitted false property values to potential lenders. The inquiry has yielded criminal charges against the Trump Organization and a plea deal with its chief financial officer, Allen H. Weisselberg.
Nearly 26 million borrowers have applied to have some of their student loan debt erased. While the government has approved 16 million applications, no debt has been canceled yet. The Education Department, which owns and manages the government’s $1.5 trillion student debt portfolio, has stopped accepting applications in light of the legal challenges.
The proposed debt cancellation would be one of the most expensive executive actions in U.S. history; the nonpartisan Congressional Budget Office estimated its cost at around $400 billion.
In response to the emergency application, lawyers for the states argued that the administration should not be allowed to use the coronavirus pandemic to justify its plan. They noted that the justices had rejected two earlier programs responding to the pandemic: an eviction moratorium and a plan to require large employers to impose vaccine or testing requirements on their workers.
“Now, while President Biden publicly declares the pandemic over,” the states’ brief said, his administration is “using Covid-19 to justify the mass debt cancellation — an unlawful attempt to erase over $400 billion of the $1.6 trillion in federal student-loan debt and eliminate all remaining loan balances for roughly 20 million of 43 million borrowers.”
The Biden administration maintains that it has the authority to grant relief under the Heroes Act of 2003, which allows the education secretary to waive regulations related to student loans during times of war or national emergency. Since the onset of the coronavirus pandemic in March 2020, the country has been operating under an emergency declaration, imposed by Mr. Trump.
The administration’s emergency application to the Supreme Court, filed by Solicitor General Elizabeth B. Prelogar, said the states had not suffered the sort of injury that would give them standing to sue. The Eighth Circuit, she wrote, had focused solely on the possibility that a nonprofit entity that services federal loans, the Missouri Higher Education Loan Authority, might fail to make payments to Missouri.
Ms. Prelogar said that possibility was not enough to establish standing and that, even if it was, the appeals court should have done no more than blocked the government from discharging loans serviced by the entity. The Eighth Circuit instead shut down the entire program nationwide while the appeal moved forward.
Ms. Prelogar also criticized the Eighth Circuit for its failure to discuss whether the administration had exceeded its authority beyond saying that the “merits of the appeal before this court involve substantial questions of law which remain to be resolved.”
“That analysis,” she wrote, “does not suffice to support any injunction — much less a universal injunction prohibiting the government from implementing a critically important policy with direct and tangible effects on millions of Americans.”
The states argued that the plan “is not remotely tailored to address the effects of the pandemic” and is instead aimed at fulfilling “the administration’s political agenda on student loans.”
The states lost the first round in their suit before Judge Henry E. Autrey of the Federal District Court in St. Louis, who was appointed by President George W. Bush.
“While plaintiffs present important and significant challenges to the debt relief plan,” Judge Autrey wrote, “the current plaintiffs are unable to proceed to the resolution of these challenges.”
A three-judge panel of the Eighth Circuit blocked that ruling. Two of its three members — Judges Ralph R. Erickson and Leonard S. Grasz — were appointed by Mr. Trump. The third, Judge Bobby E. Shepherd, was appointed by Mr. Bush.