Justice Barrett Gives Biden a Big Win on Student Debt Relief

Justice Barrett Gives Biden a Big Win on Student Debt Relief

A Wisconsin taxpayers’ group asked the Supreme Court to step in and temporarily block the Biden administration’s student loan debt relief program.

 

A Wisconsin taxpayers’ group on Wednesday asked the Supreme Court to step in and temporarily block the Biden administration’s student loan debt relief program, CNBC reported.

The request made by the Brown County Taxpayers Association, which is being represented by the Wisconsin Institute for Law and Liberty, was directed to Justice Amy Coney Barrett, who is responsible for handling emergency application requests from the 7th Circuit U.S. Court of Appeals.

 

According to the group’s filing, student loan cancellations could start as soon as October 23 if the court does not intervene. Lawyers for the group are arguing 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 wrote.

The challenge, however, was quickly rejected by Barrett on Thursday.

The Biden administration is currently facing several legal challenges over the debt relief program, but this is the first to reach the Supreme Court.

According to the Education Department, more than 40 million Americans are eligible for the 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.

Since the student loan announcement, the White House updated the program to exclude borrowers with privately held federal student loans. The policy change is centered on those who initially took out both Perkins and Federal Family Education Loans (FFEL), which were issued and managed by private banks but guaranteed by the federal government. Roughly 700,000 people will be affected by the change, according to the White House.

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

“Today marks a big step, among others, that my administration is taking to make education a ticket to the middle class that folks can actually afford,” President Joe Biden said while officially launching the new application website. “The new student loan application is now open. If you have federal student debt, please visit StudentAid.gov. It’s easy, simple and fast and it’s a new day for millions of Americans all across our nation.”

Biden noted that the application website “landed and handled more than 8 million applications without a glitch or any difficulty.” He also urged other Americans saddled with federal student loan debt to apply via an online form that is “easy, simple and fast.”

 

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.