Supreme Court Rejects Bid to Block Student Loan Forgiveness

Supreme Court Rejects Bid to Block Student Loan Forgiveness

More than 40 million Americans are eligible for the student loan debt relief program, with roughly 81 percent of them expected to apply for relief.

Supreme Court Justice Amy Coney Barrett on Thursday denied an emergency application to block the Biden administration’s student loan debt relief program, Axios reported.

The application was submitted on Wednesday by the Brown County Taxpayers Association, which is being represented by the Wisconsin Institute for Law and Liberty. Lawyers for the group argued that the implementation of the program would be a “staggering blow” to the U.S. Treasury and taxpayers by allowing the president to “spend roughly 4 percent of the nation’s Gross Domestic Product.”

“We are witnessing a gargantuan increase in the national debt accomplished by a complete disregard for limitations on the constitutional spending authority,” the lawyers argued.

According to the group’s filing, student loan cancellations could start as soon as this weekend if the court does not intervene.

While Barrett, who is responsible for handling emergency application requests from the 7th Circuit U.S. Court of Appeals, didn’t offer any comments on the decision, a notation of her denial on the Supreme Court’s docket did not indicate that she referred the application to the entire Supreme Court before rejecting the request.

Axios reported that an October 6 ruling by U.S. District Judge William Griesbach had already dismissed the case, ruling that the act of paying taxes did not give the Brown County Taxpayers Association grounds to challenge the debt relief program.

Meanwhile, CNN reported on Thursday that a federal judge dismissed a legal challenge from six Republican-led states against the student loan forgiveness plan. U.S. District Judge Henry Edward Autry ruled that the attorneys general for Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina did not prove that they are directly harmed by the relief and therefore do not have standing. The states are expected to appeal.

According to the Education Department, more than 40 million Americans are eligible for the student loan debt relief program, with roughly 81 percent of them expected to apply for relief. Under the plan, those with federal student loans who make under $125,000 annually, or couples earning less than $250,000, qualify for up to $10,000 in forgiveness. However, if a borrower received a Pell Grant to attend college, they could potentially get up to $20,000 in relief.

Earlier this week, the White House confirmed that more than 8 million Americans have already applied for the student loan forgiveness program.

Ethen Kim Lieser is a Washington state-based Finance and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.

Image: Reuters.