Supreme Court agrees to decide fate of Biden’s student debt relief

The Supreme Court announced on Thursday that it will hear arguments about the legality of President Joe Biden’s student debt relief program in the coming months while keeping the policy on hold in the meantime.

The decision tees up a high-stakes battle at the high court early next year that will decide the fate of Biden’s sweeping plan to provide up to $20,000 of debt relief to tens of millions of Americans who owe federal student loans.

The court on Thursday deferred a ruling on the administration’s emergency request to immediately reinstate its debt relief program. Instead, the court said, the justices will hear arguments on the matter next year.

The case will “be argued in the February 2023 argument session,” the court said in a one-page order. No justice noted any dissent to the court’s decision not to immediately grant the Biden administration’s application to move forward with the debt relief program now.

Putting the case on the docket for the current court term means a decision is likely by June, if not earlier.

The Supreme Court’s decision to fast-track arguments about the legality of Biden’s debt relief plan comes just several months after he first announced it in August following months of pressure from progressives. Conservative groups and Republican state officials have filed a wave of legal challenges to stop Biden's debt relief.

The case that the justices have agreed to hear involves a challenge from six Republican-led states: Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. The states argue the debt relief plan will reduce tax revenues or other funding that is related to state-related entities that own, manage or invest in federal student loans.

The Supreme Court said it would address two questions: whether the Republican attorneys general have standing to bring the case in the first place and “whether the plan exceeds the Secretary’s statutory authority or is arbitrary and capricious.”

The Education Department has approved some 16 million borrowers for loan forgiveness under the program, but the relief has remained on hold since the middle of October because of the court challenges. Nearly 10 million additional borrowers are in line for relief, according to the department.

Biden and the Republican-led states suing to block his plan had both recommended that the Supreme Court address the merits of whether the debt relief program is legal.

Biden said last week that he was extending the pause on federal student loan payments into next year in order to give the court time to address the case. The White House reiterated again on Thursday that payments would remain on hold while the Supreme Court considers the case.

“We welcome the Supreme Court’s decision to hear the case on our student debt relief plan for middle and working class borrowers this February,” White House press secretary Karine Jean-Pierre said in a statement. “This program is necessary to help over 40 million eligible Americans struggling under the burden of student loan debt recover from the pandemic and move forward with their lives.”

The court’s move to address the merits of the program circumvents lower federal appeals courts that have ruled against the administration in preliminary orders but have not yet addressed the substance of the policies.

The 8th Circuit Court of Appeals last month issued an injunction prohibiting the Biden administration from carrying out the plan while it hears an appeal by the Republican states who were rebuffed by a district court judge’s decision to toss their lawsuit on the grounds they lacked standing.

Separately, the 5th Circuit Court of Appeals on Wednesday turned down an administration request to lift a ruling that a district judge in Texas issued that struck down the debt relief plan as illegal. The administration has indicated it plans to ask the Supreme Court to intervene in that case as well. The court could consolidate that case with the one it agreed to hear on Thursday.

The administration argues that the student debt plan is legal under a 2003 law that gives the Secretary of Education special powers to waive the rules governing federal student loans during national emergencies. Biden and his aides have said that the ongoing effects of the coronavirus pandemic constitute such an emergency and that mass debt relief would help avoid a spike in defaults and delinquencies when borrowers eventually resume payments. Opponents of the plan, meanwhile, say that the flexibility to pause repayments during a crisis doesn’t extend to permanent forgiveness of loans or large chunks of them. Republicans argue that Biden's debt relief is an illegal end-run around Congress.