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Where student loan forgiveness stands: Legal fight shifts to Supreme Court

President Biden’s student debt forgiveness plan has been hit with a barrage of lawsuits that cast its future in doubt.

At least two challenges will be considered next month by the Supreme Court. 

Here’s where the cases against the plan stand and a rough guide on when borrowers will have some answers about the program’s future.

Biden v. Nebraska

The first case that blocked the program and will now be reviewed by the Supreme Court is Biden v. Nebraska from the 8th Circuit Court of Appeals, which covers states in the mid- to north-central U.S. 

A group of six Republican-led states challenged Biden’s program, arguing the debt relief would harm their states economically due to the loss of tax revenue and other profits from working relationships state entities have with some loan servicers. 

The 8th Circuit issued a temporary injunction in November to halt the program until the legality of the debt relief is decided. The Supreme Court said in December it would hear the case, putting the program on hold until then.

Department of Education v. Brown

The second case, Department of Education v. Brown, that ruled Biden’s program illegal came out of the 5th Circuit Court of Appeals.

The case was brought by two individuals, backed by the Jobs Creators Network Foundation, with a Texas district judge saying Biden does not have the power to create this program. 

The 5th Circuit Court of Appeals upheld the district ruling in November, with the Supreme Court also announcing in December it will hear the merits of this case. 

What’s the timeline?

In both cases, the Biden administration argues it has the power under the 2003 HEROES Act — or Higher Education Relief Opportunities for Students Act — to create the program, as the law gives the Department of Education special authority during national emergencies, such as the COVID-19 pandemic. 

The Supreme Court’s taking of the cases gives borrowers a better idea of when they could get a final answer on whether they will receive at least $10,000 in student loan forgiveness.

The Biden administration must submit an opening brief for the cases to the Supreme Court by Jan. 4.

The GOP-led states and Jobs Creators Network Foundation have until Jan. 27 to get their separate briefs to the court. 

Lastly, Biden will be allowed to submit a reply brief by Feb. 15 before the Supreme Court takes on the oral arguments in the case.

The Supreme Court will hear oral arguments for the cases on Feb. 28. Borrowers can listen to the arguments and questions the judges will have for both sides.

Although the Supreme Court could make a decision any time after the oral arguments are completed, borrowers can likely expect a final ruling from the Supreme Court on the matter in May or June, when the justices typically release opinions to the public for the term.

The Biden administration says it will fight for student debt relief until the end, but that could be an uphill battle with the conservative-leaning Supreme Court.

If the Supreme Court rules the debt relief program legal, the Biden administration could start forgiving student debt right away. If rules go south for the administration, it would have to find different ways to meet the Democratic Party’s goal of student loan forgiveness.
 

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