Published: 02nd December 2022
US Supreme Court to have the final say on Biden's student loan cancellation plans
President Joe Biden's plan promises USD 10,000 in federal student debt forgiveness to those with incomes of less than USD 125,000 or households earning less than USD 250,000
The United State Supreme Court will decide whether the Joe Biden administration can broadly cancel student loans, as was decided in August this year. On Thursday, December 1, the Supreme Court decided that it will provide its final verdict on whether the programme by the Biden administration is legal or not by early summer, reported Associated Press. The newly extended pause on student loan repayment is set to expire on June 30.
President Joe Biden's plan promises USD 10,000 in federal student debt forgiveness to those with incomes of less than USD 125,000 or households earning less than USD 250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for an additional USD 10,000 in relief. AP reported that the Congressional Budget Office has said the programme will cost about USD 400 billion over the next three decades. More than 26 million people have already applied for the relief, with 16 million approved, but the Education Department stopped processing applications last month after a federal judge in Texas struck down the plan.
Now, with the Supreme Court declaring that it will take a final call on the matter, the programme has been resumed, even as the SC's verdict is awaited. President Biden said on Twitter that the White House will keep fighting for the loan plan. "Republican officials are throwing up roadblocks in order to prevent middle-class families from getting the student debt relief they need," he said in a tweet.
The Texas case is one of two in which federal judges have forbidden the administration from implementing loan cancellations. In a separate lawsuit filed by six states, a three-judge panel of the 8th US Circuit Court of Appeals in St Louis also put the plan on hold and that case is also before the Supreme Court, reported AP.
The moratorium had been slated to expire on January 1. This date had been set by Biden before his debt cancellation plan stalled in the face of legal challenges from conservative opponents. The new expiration date is 60 days after the legal issue has been settled, but no later than the end of August.
According to AP, Conservative attorneys, Republican lawmakers and business-oriented groups have asserted that Biden overstepped his authority in taking such sweeping action without the assent of Congress. They called it an unfair government giveaway for relatively affluent people at the expense of taxpayers who didn't pursue higher education.