U.S. Supreme Court to decide fate of Biden’s student loan forgiveness

By John Kruzel

WASHINGTON (Reuters) – The U.S. Supreme Court was set to rule on Friday on the legality of President Joe Biden’s plan to write off $430 billion in student loan debt – a decision intended to benefit 43 million Americans and fulfill a campaign promise.

Conservative justices during oral arguments in the case in February expressed skepticism about the plan as they pondered legal challenges brought by six conservative-leaning states – Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina – and two individual borrowers.

The dispute, one of two major decisions the justices are expected to make on the final day of rulings for their term which began in October, has high stakes for 26 million U.S. borrowers who sought relief after Biden announced the plan in August 2022 until the end of November, when lower courts blocked the plan.

Biden’s plan fulfilled his 2020 campaign promise to cancel some $1.6 trillion in federal student loan debt, but was criticized by Republicans who called it an abuse of his authority and unfair advantage for college-educated borrowers, while other borrowers did not receive such relief. Biden is seeking re-election next year.

Under the plan, the U.S. government would forgive up to $10,000 in federal student debt for Americans earning less than $125,000 who got loans to pay for college and post-secondary education and $20,000 for recipients of Pell grants for students from low-income families.

During the February closing arguments in the case, the Biden administration said the plan was authorized under a 2003 federal law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, which empowers the U.S. secretary to education to “waive or modify” student financial aid during the war. or national emergencies.”

Biden, a Democrat, and his Republican predecessor Donald Trump relied on the HEROES Act from 2020 to repeatedly suspend student loan payments and prevent interest from accumulating to ease the financial strain on borrowers students during the COVID-19 pandemic.

During oral argument, a Justice Department attorney described the debt relief as a benefits program rather than an assertion of regulatory power not authorized by Congress.

In response to the states’ legal challenge, a federal judge in Missouri ruled in October 2022 that they lacked legal standing to sue. On appeal, the United States Court of Appeals for the 8th Circuit, based in St. Louis, found that at least one of the states, Missouri, had standing.

In the case brought by individual borrowers named Myra Brown and Alexander Taylor, a Texas federal judge ruled in November 2022 that the plan was beyond the authority of the Biden administration — a decision the 5th Circuit Court of Appeals based in New Orleans refused to put up. hold on call.

Some 53% of Americans said they support Biden’s debt relief, with 45% opposed, according to a March Reuters/Ipsos poll, with respondents split sharply along partisan lines, with Democrats broadly in favor and Republicans generally. opposites.

(Reporting by John Kruzel; Editing by Will Dunham)

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