The Biden administration plans to ask the Supreme Court to revive its student debt relief plan after an appeals court and a lower court decision have blocked the president’s program to forgive up to $20,000 of debt for millions of borrowers, according to the Department of Justice‘s latest court filing signaling the forthcoming plans.
The DOJ submitted a court filing Thursday previewing its plans to ask the highest court to reverse an injunction issued earlier this week by the U.S. Court of Appeals for the 8th Circuit, which blocked the administration from rolling out the debt forgiveness policy, a program estimated by the Congressional Budget Office to cost nearly $400 billion over the next 30 years.
The agency is separately asking the 5th Circuit to halt a decision by a district court judge in Texas that previously ruled the plan as “unlawful.” The DOJ specifically requested the appeals court to make a decision by Dec. 1 “to allow the government to seek relief from the Supreme Court” if needed, according to court records.
BIDEN’S STUDENT LOAN PLAN LIKELY HEADED TO SUPREME COURT AS MILLIONS OF BORROWERS AWAIT RELIEF
Allowing the debt relief plan to remain paused would leave the federal government with an “unnecessarily perilous choice,” the administration argued in its filing. If required debt payments restart again on Jan. 1 in accordance with the present plan, tens of millions of U.S. residents who were promised debt relief will be forced to front the bill on their outstanding federal tuition debt.
But if the Biden administration extends the payment pause, it could “cost an additional $120 billion,” disproportionately benefit high-income households, and increase the risk of recession, according to the nonprofit Committee for a Responsible Federal Budget.
The Education Department has signaled in recent days a threat of soaring default rates if President Joe Biden’s plan doesn’t go through, arguing that the debt relief would help borrowers save an average of up to $300 monthly.
“We anticipate there could be an historically large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic,” Education Undersecretary James Kvaal wrote in a Tuesday filing. “This could result in one of the harms that the one-time student loan debt relief program was intended to avoid.”
The Biden administration hit a legal landmine when it announced the debt relief plan in August and has faced a flurry of lawsuits from conservative and libertarian legal groups, which argue the administration is wrong to justify its massive relief plan under the 2003 HEROES Act.
Much of the litigation against the debt relief plan has been rejected due to a lack of legal authority, or standing, to present that the program has caused damage to plaintiffs challenging the policy. For example, Supreme Court Justice Amy Coney Barrett has already twice rejected emergency appeals from separate cases, presumably without further consideration from the other eight justices.
But so far, challenges have prevailed in lower courts.
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In the latest DOJ filing Thursday, the agency asked the 5th Circuit to lift a decision from Texas District Judge Mark Pittman, an appointee of former President Donald Trump who ruled last week that the administration overstepped its authority and usurped Congress’ powers to make laws over such policies.
Biden’s plan aims to forgive $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Meanwhile, Pell Grant recipients would receive an additional $10,000 in debt forgiveness.
