Federal courts on Thursday delivered two wins for President Joe Biden’s student loan forgiveness plan. Supreme Court Justice Amy Coney Barrett rejected a challenge to the program brought by a Wisconsin taxpayers group. And on the same day, a federal district court judge rejected a separate lawsuit brought by six Republican-led states.
Student loan cancellations, worth up to $20,000 per eligible borrower, could show up on borrowers’ accounts as soon as Sunday. Lawyers for the government agreed in court documents to hold off on discharging any debt before October 23 as it faces several legal challenges.
The appeal at issue in the Supreme Court case was considered an uphill battle because lower courts had ruled that the group, the Brown County Taxpayers Association, did not have the legal right or “standing” to bring the challenge. Under normal circumstances, taxpayers don’t have a general right to sue the government over how it uses taxpayer funds.
Barrett acted alone because she has jurisdiction over the lower court that ruled on the case. She declined to refer the matter to the full court. Her denial appeared as a single sentence on the court’s docket.
A federal judge in Missouri, US District Judge Henry Edward Autrey, rejected the lawsuit from the GOP-led states also because the plaintiffs did not have the legal standing to bring the challenge.
The plaintiffs in that case had asked the judge to put student loan cancellation on hold until issuing a final ruling on the case. The lawsuit was filed in a federal court in Missouri last month by state attorneys general from Missouri, Arkansas, Kansas, Nebraska and South Carolina, as well as legal representatives from Iowa.
The states have filed an appeal, sending the case to the 8th Circuit Court of Appeals, where it is likely to face a panel of conservative judges.
The Biden administration is also facing 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 claim that the Biden administration does not have the legal authority to broadly cancel student loan debt.
Lawyers for the government argue that Congress gave the secretary of education the power to discharge debt in a 2003 law known as the HEROES Act.
Although dismissed by one federal judge, the legal challenge filed by the six states is widely seen as one of the most formidable challenges making its way through the courts.
It is the “most plausible legal challenge to the Biden Jubilee,” said Luke Herrine, an assistant law professor at the University of Alabama who previously worked on a legal strategy pushing for student debt cancellation, in a tweet Thursday.
The Biden administration’s program
Biden’s student loan forgiveness program, first announced in August, aims to deliver debt relief to millions of borrowers before federal student loan payments resume in January after a nearly three-year, pandemic-related pause.
While the application officially opened on Monday, the Biden administration has agreed in court documents to hold off on canceling any debt until October 23. Once processing begins, most qualifying borrowers are expected to receive debt relief within weeks.
Under Biden’s plan, eligible individual borrowers who earned less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 annually in those years will see up to $10,000 of their federal student loan debt forgiven.
If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness.
This headline and story have been updated with additional information.