Student loan forgiven: Biden admin says student debt relief plan should be allowed to go ahead on appeal

WASHINGTON, D.C. — The Justice Department told an appeals court on Monday that the Biden administration should be allowed to implement its student debt relief program while litigation over the policy continues.

In a new filing with the 8th U.S. Circuit Court of Appeals, which is hearing challenges to the program brought by six Republican-led states, the administration defended the policy, arguing that the applicants’ case had serious procedural flaws.

The Justice Department said the challenge was “based on speculation about possible economic consequences.”

Last week, a district court dismissed the Republican states’ case, finding that the states had not shown they would suffer direct harm from the policy that would justify judicial intervention. Following an appeal from claimants, the 8th Circuit on Friday administratively halted the policy, barring the Biden administration from canceling any loans under the program while the appeals court considered the states’ emergency request for judicial involvement.

In its brief on Monday, the Justice Department wrote that U.S. Education Secretary Miguel Cardona acted within his authority in implementing the policy, telling the court that “the Secretary reasonably believed it necessary to use his authority under the HEROES Act to prevent harm caused by the pandemic.” low-income student loan borrowers.”

“Congress could hardly have been clearer in its intent to grant the Secretary maximum flexibility to ensure that borrowers are not disadvantaged financially by the national emergency, and the Secretary followed the simple terms of the law,” the Justice Department wrote.

After the ruling, the White House and Cardona urged borrowers to continue applying for aid despite the delay, and Cardona vowed on Saturday to continue “moving full speed” on plans to implement the debt relief program.

A response from the GOP-led states is due Tuesday.

The Biden administration also faced lawsuits from Arizona Attorney General Mark Brnovich and conservative groups such as the Job Creators Network Foundation and the Cato Institute.

Many of the legal challenges argue that the Biden administration does not have the legal authority to broadly cancel student loan debt.

Biden’s student loan forgiveness program, first announced in August, aims to provide debt relief for millions of borrowers before federal student loan payments resume in January after a nearly three-year pause due to the pandemic.

Under Biden’s plan, individual borrowers who earned less than $125,000 in 2020 or 2021, and married couples or heads of households who earned less than $250,000 a year in those years, would have up to $10,000 forgiven federal student loan.

If an eligible borrower also received a federal Pell Grant while attending college, the individual is eligible for up to $20,000 in debt forgiveness.