The Supreme Court again refused to block Biden’s student loan relief plan

Supreme Court nominee and U.S. Court of Appeals Judge Amy Coney Barrett on October 21, 2020, on Capitol Hill in Washington.

Ken Cedeno | Reuters

The Supreme Court on Friday rejected a second request to block the Biden administration’s student loan relief plan.

Judge Amy Coney Barrett dissented Urgent application to block the plan brought Tuesday by the conservative legal group Pacific Legal Foundation on behalf of two borrowers in Indiana.

On October 20, Barrett The same request was rejected From the Brown County Taxpayers Association of Wisconsin.

Barrett is responsible for such applications issued from cases from the 7th U.S. Circuit Court of Appeals covering Indiana and Wisconsin.

Friday’s decision had little practical effect. For now, student loan forgiveness is on hold Challenge Brought up by six Republican-led states. An appeals court judge in the 8th Circuit in October granted the states’ emergency motion to stay the plan pending consideration of the states’ appeal.

More from Personal Finance:
The Treasury announces a new Series I bond rate of 6.89%
Education to reduce ‘red tape’ in PSU loan waivers
26 million borrowers have applied for student loan forgiveness

From the White House in August Published Its plan — canceling student loans of up to $10,000 for most borrowers and $20,000 for recipients Bell Grants For low-income families – at least six cases were faced.

26 million Americans have already applied for student loan forgiveness, and the Biden administration has approved 16 million requests, the White House said Thursday. Despite the recent challenges, the administration continues to encourage borrowers to apply for relief.

See also  Russia invaded Ukraine and attacked Mariupol from the Sea of ​​Azov

“We are disappointed by today’s denial, but will continue to fight this proposal in court,” Caleb Krukenberg, an attorney with the Pacific Legal Foundation, said in an emailed statement.

“Practically since the plan was announced, the administration has tried to avoid judicial scrutiny,” Krukenberg said. “So far they’ve succeeded. But that doesn’t change the fact that this program is illegal.”

‘Standing up’ to apologetic challenges is an issue

Experts say the main hurdle for those hoping to overturn the president’s action is finding a plaintiff who can prove they were harmed by the policy.

“Such injury is required to establish what courts call ‘standing'” Lawrence tribe, a Harvard law professor, recently told CNBC. “For example, no individual or business or state is affected by how private lenders would be affected if student loans were canceled.”

In that light, Barrett’s decision to reject the Pacific Legal Foundation’s request is not surprising, said higher education expert Mark Kantrowitz.

“There were very few substantive differences between their original case and the new case, indicating a lack of legal standing,” he said.

In the Pacific Legal Foundation case, Indiana-based plaintiffs Frank Garrison and Noel Johnson May suffer financially If some of their student loans are automatically forgiven, they’ll pay state taxes on those canceled loans.

Indiana is one of many states It said the pardon would be taxed at the state level, and was possible At district level.

Garrison and Johnson are both attorneys; Garrison works at the Pacific Law Foundation and Johnson at the Public Interest Law Foundation. They are Continues relief By Public Service Loan Forgiveness Scheme, which allows people working in the government or certain non-profit organizations to cancel their loan after 10 years or make 120 payments. PSLF apology Not treated as taxable income.

After the initial lawsuit, the Department of Education said borrowers could opt out if they didn’t want their loans forgiven.

Education loan borrowers ‘in lock’

As legal challenges mount, borrowers are wondering where student loan forgiveness is, financial advisors say.

“The intervention of the courts is really worrisome because people are so concerned about what’s going on with their student loans,” said Ethan Miller, a certified financial planner and founder of Planning for Progress in the Washington, D.C., area. Miller specializes in clients with student loans.

“There was a plan that clearly outlined the steps,” he said. “And yet everyone is left confused.”

Leave a Reply

Your email address will not be published.