© Reuters. FILE PHOTO: U.S. President Joe Biden delivers remarks about the student loan forgiveness program from the auditorium on the White House campus in Washington, U.S., October 17, 2022. REUTERS/Leah Millis/File Photo
It’s Andrew Chung
(Reuters) – President Joe Biden’s administration on Friday asked the Supreme Court to overturn a lower court’s order blocking his plan to freeze billions of dollars in student loans amid a crisis faced by six Republican-led states.
In a move to benefit millions of Americans, Mr. Biden announced in August that the US government would forgive up to $10,000 in student loan debt for borrowers who make less than $125,000 a year, or $250,000 for married couples.
Mr. Biden’s plan was opposed by six states who argued that it left government officials and threatened future funding. A federal judge dismissed their case for lack of a warrant, though the 8th Circuit’s Nov. 14 in St. Louis, Missouri, banned the program while states appealed the judge’s decision.
The Ministry of Justice in a filing has asked the Supreme Court to set aside the decision, saying it leaves millions of people financially vulnerable.
The department also said the high court could bypass the appeals court and hear the dispute quickly, with a decision expected by the end of June.
The state is also challenging a separate ruling by a federal judge in Fort Worth, Texas, that also threatens the debt relief program. US Judge Mark Pittman on Nov. 10 found the program illegal when they agreed with two borrowers who sued because they didn’t qualify for the program and believed their debt “should also be forgiven.”
Administrators stopped accepting student loan applications after Pittman’s decision.
The DRM Budget Office in September calculated that debt relief would cost the government about $400 billion. The program also said students who received Pell Grants to benefit low-income college students would have up to $20,000 of their loan debt eliminated.
Several legal challenges have been filed against Biden’s authority to cancel the loan under the 2003 Higher Education Relief Opportunities for Students Act, which allows the government to modify or cancel federal student loans during times of war or emergencies. The Biden administration says the COVID-19 pandemic represents an emergency.
The plan, which has drawn opposition from Republicans, fulfills a promise the Democratic president made during the 2020 presidential campaign to help students who were already in debt.