Biden Administration to Call on Supreme Court to Reverse Student Debt Relief Injunction

Mandatory Credit: Photo by Leon Neal/AP/Shutterstock (13623354gt)President Joe Biden attends the global meeting of G20 leaders in Nusa Dua, Bali, IndonesiaG20, Nusa Dua, Indonesia - 15 Nov 2022.
Leon Neal/AP/Shutterstock / Leon Neal/AP/Shutterstock

The Biden administration is planning to ask the Supreme Court to lift the injunction on its student debt relief program, according to court papers it filed Nov. 17, several outlets report.

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The filing comes just three days after a federal appeals court issued a nationwide injunction on Nov. 14, temporarily barring President Joe Biden’s student loan debt relief program.

“The injunction will remain in effect until further order of this court or the Supreme Court of the United States,” a three-judge panel of the U.S. Court of Appeals for the 8th Circuit said, according to the Nov. 14 ruling, GOBankingRates previously reported.

This decision follows the pause on debt relief, on Oct. 21, by the U.S. Court of Appeals for the 8th Circuit, while it was reviewing a lawsuit filed by six Republican-leaning states — Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina, GOBankingRates previously reported. 

According to the Associated Press (AP), the administration said it is also prepared to appeal the other case if needed. On Nov. 10, a federal judge in Texas struck down the program on Nov. 10, saying that the law “does not provide the executive branch clear congressional authorization to create a $400 billion student loan forgiveness program,” according to court documents.

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The administration’s Nov. 17 filing states that keeping the debt relief on hold would leave the government with an “unnecessarily perilous choice.”

“If it restarts student loan payments as planned on Jan. 1, millions of Americans will get billed for debt that was promised to be canceled. But if the government extends the payment pause, it will cost billions of dollars in lost revenue,” according to the AP.

The White House said last week that 26 million borrowers had already given the Department of Education the necessary information to be considered for debt relief, and that 16 million of them had already been approved.

“Courts have issued orders blocking our student debt relief program. As a result, at this time, we are not accepting applications. We are seeking to overturn those orders,” a notice on Studentaid.gov now reads.

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Under the Biden plan, up to $10,000 in federal student debt relief may be offered to borrowers whose income in 2020 or 2021 was less than 125,000 (or $250,000 for households). That figure rises to up to $20,000 in student loan cancellation for Pell Grant recipients. If you are a dependent student, your eligibility is based on your parental income. Most federal loans are eligible.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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