The U.S. Supreme Court on Monday granted certiorari review to a second case challenging the Biden administration’s plans to forgive student loans affecting millions of borrowers.
The latest case, brought by two individuals, is the second challenge to the loan forgiveness plan the Supreme Court has agreed to hear on an expedited basis sometime in February 2023.
On Nov. 2, the U.S. Department of Education applied for a stay of judgment after a federal judge in Texas halted the Biden administration’s student debt relief program that would waive up to $20,000 of debt for working, middle-class federal borrowers. According to statements by President Joe Biden, 22 million people applied for the program in the first week applications were open. The U.S. Department of Education estimates that the program would cost an average of $30 billion annually over the next 10 years.
The day before the stay application Nov. 1, the Supreme Court agreed to hear a challenge to the program brought by Nebraska and a handful of other states against the program.
The latest appeal being heard was brought by two student loan borrowers, Myra Brown and Alexander Taylor. Brown wouldn’t be eligible for forgiveness under Biden’s plan and Taylor would be eligible for only $10,000 in relief. The two plaintiffs represented by the Job Creators Network, an organization that describes itself as a free market business advocate opposing government overreach, filed a lawsuit in Texas federal court in October arguing the Biden administration’s plan improperly skirted notice and public comment period requirements and denied Brown and Taylor of their procedural rights.
On Nov. 11, Judge Mark Pittman of the U.S. District Court for the Northern District of Texas Fort Worth Division entered summary judgment in favor of the plaintiffs and ruled the program was unlawful and blocked it from taking effect. Pittman’s order wasn’t based on Brown and Taylor’s notice arguments, but instead found the U.S. Secretary of Education exceeded the department’s authorized power and didn’t meet requirements of the major questions doctrine. The 5th Circuit Court of Appeals denied a motion by the government to stay the order pending appeal.
On appeal to the U.S. Supreme Court, Solicitor General Elizabeth Prelogar asked the court to stay the ruling or alternatively, defer the application pending oral arguments over the program and treat the application as a writ of certiorari.
“This is the second of two cases in which lower courts have entered nationwide orders blocking the Secretary of Education’s plan to use his statutory authority to provide debt relief to student-loan borrowers affected by the COVID-19 pandemic,” wrote Prelogar in the application. “This Court should stay the district court’s judgment, which flouts fundamental principles of party presentation and Article III.”
Among other things, Prelogar argued the district court erred by considering an argument that wasn’t raised by the plaintiffs and the plaintiffs didn’t have Article III standing created by a concrete actual or imminent injury. The government also argued the power to relieve student debt was in fact authorized by a 2003 program, the HEROES Act, that authorized the U.S. Secretary of Education to waive or modify student debt in connection with national emergencies.
On Monday, the U.S. Supreme Court agreed to defer the application for stay pending oral argument and granted it as a petition for writ of certiorari. The court directed the parties to prepare briefs and arguments on two questions: do the plaintiffs have Article III standing? And, was the student debt relief plan statutorily authorized and adopted in a procedurally proper way? The court said it will hear the case in February as an expedited proceeding.
The court will also hear arguments for a different challenge to the student loan relief program in February brought by six states. In that case, Biden v. Nebraska, the court will consider if the plaintiff states have Article III standing to bring the lawsuit and if the plan would exceed the Secretary of Education’s statutory authority or is arbitrary and capricious.
The Supreme Court hasn’t indicated if the two appeals will be argued together or separately.
Since it was announced in August, the Biden administration’s student debt forgiveness plan has been the subject of numerous legal challenges.
The U.S. Department of Education has repeatedly extended federal loan repayment pauses created in response to the COVID-19 pandemic and said the proposed debt relief program is meant to prevent a spike in student loan payment default rates.
After the Nov. 11 ruling by Pittman, the U.S. Department of Education paused applications for debt relief pending court proceedings.
Biden Tweeted on Nov. 22 that his administration will extend the repayment pause until June 2023 to allow the U.S. Supreme Court to rule on the program. In the Tweet, the president added he was confident the relief plan is legal and blamed Republican officials for the pause.