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Supreme Court agrees to hear second dispute over Biden’s student loan forgiveness plan

Washington- The Supreme Court will hear a second challenge to President Biden’s student loan forgiveness program, he said Monday, setting oral arguments for late February or early March in a dispute brought by two borrowers with outstanding student loans.

The legal battle raging in Texas over Mr. Biden’s plan to provide up to $20,000 in student loan relief to millions of borrowers joins another case filed by a group of six Republican-led states, and the Supreme Court will decide next year.

In its organize In announcing the decision to hear the Texas case, the Supreme Court said the parties will discuss two issues: whether borrowers Myra Brown and Alexander Taylor have legal standing to challenge the legality of the relief plan and whether the plan is “authorized by law.” and it was adopted in a procedurally proper manner.”

In both legal fights before the Supreme Court, lower courts blocked the implementation of the student loan forgiveness program across the country, prompting the Justice Department to file emergency motions with the higher court to reinstate the plan. But the aid program remains on hold pending oral arguments in the two cases. Last month, the president extended his pause on federal student loan repayments until June 30, giving the high court time to consider the disputes.

Mr Biden Announced in August it planned to cancel up to $10,000 in federal student debt for Americans who earn less than $125,000 a year, and an additional $10,000 for recipients of Pell Grants, which are awarded to students with the greatest financial need. More than 26 million people have already applied pardon, and 16 million applications have been approved, according to the Department of Education.

The White House estimated that up to 43 million borrowers will receive relief under the administration’s plan, of whom nearly 20 million people will have their remaining debt paid off in full.

Following the announcement of the debt forgiveness plan, the Departments of Justice and Education issued grades detailing the legal authority for the cancellation of student debt, based on a 2003 law called the HEROES Act, enacted after the terrorist attacks of September 11, 2001. The law, the Biden administration argued in the memos, gave the Education Secretary Miguel Cardona, the authority to grant relief to recipients of federal student loans during national emergencies, such as the COVID-19 pandemic.

But the student loan forgiveness program was quickly challenged in federal court, including by the two Texas borrowers, Brown and Taylor. Brown is not eligible for relief under Mr. Biden’s plan, as his loans are held by commercial entities, while Taylor is eligible for $10,000 loan forgiveness.

The two claimed in their lawsuit against the Department of Education and Cardona who improperly promulgated the plan without a notice and comment regulation, depriving them of the opportunity to comment on the program.

A federal district court in Texas on the side of the borrowers, ruling that the plan is illegal and preventing the Department of Education from canceling any debt. The Justice Department appealed, but the US Court of Appeals for the Fifth Circuit denied its request to stay the lower court’s order while legal proceedings unfolded.

Attorney General Elizabeth Prelogar asked the Supreme Court this month to reinstate the student loan forgiveness program or, if the court was not prepared to grant relief, hear the case along with the challenge of the red states.

“The damage to the government and the public from overturning the Secretary’s action is significant,” Prelogar told the court. “The HEROES Act reflects Congress’s judgment that the Secretary must be able to act quickly and effectively to provide relief to student loan borrowers affected by national emergencies. Here, the Secretary has crafted relief to protect borrowers vulnerable to late payment and default (and therefore wage garnishment, credit report damage, and forfeiture of federal benefits).”

The injunction issued by the district court, it said, “frustrates the government’s ability to respond to the damaging economic consequences of a devastating pandemic with the policies it has determined are necessary” and leaves borrowers in “unsustainable limbo.” .

Like the lawsuit brought by the pair of Texas borrowers, the six-state coalition that challenged the Biden administration’s plan argued that the Biden administration exceeded its authority with its plan to forgive student loan debt. The states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — also said the program will affect revenue earned from servicing federal student loans.

A federal district court in Missouri dismissed the suit for lack of legal capacity, but the US Court of Appeals for the 8th Circuit. granted a request from the states to block the implementation of the plan, prohibiting the Department of Education from canceling any student loan debt under the program.

Prelogar petitioned the Supreme Court in November to either lift the 8th Circuit’s injunction or agree to hear the case. He agreed to do it at the beginning of the month.

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