GOP-Led States Ask Supreme Court to Keep Biden’s Student Loan Wipeout Frozen

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Tom Ozimek is a senior reporter for The Epoch Times. He has a broad background in journalism, deposit insurance, marketing and communications, and adult education.
November 24, 2022Updated: November 24, 2022

A coalition of Republican-led states petitioned the Supreme Court on Wednesday to reject President Joe Biden’s bid to reinstate his student loan forgiveness scheme and instead keep it frozen until litigation around it is resolved, while accusing the administration of exploiting the COVID-19 pandemic to hide the president’s “true goal” of erasing student debt.

In a Supreme Court filing (pdf), the GOP-led states argued that Biden exceeded his executive authority in announcing the student debt wipeout, which is the subject of several lawsuits and recently ordered to be put on hold by a court.

On Nov. 10, the St. Louis-based U.S. Court of Appeals for the 8th Circuit froze Biden’s debt forgiveness plan and prompted the federal government to stop receiving applications.

But the Biden administration filed an emergency appeal with the Supreme Court last week, seeking to overturn the lower court’s decision and reinstate the student loan forgiveness scheme.

The Biden administration argued in a filing (pdf) that the 8th circuit court’s “erroneous injunction” would lead to a number of harms, including leaving “millions of economically vulnerable borrowers in limbo.”

Biden and Cardona
President Joe Biden (L), joined by Education Secretary Miguel Cardona, speaks on student loan debt in the Roosevelt Room of the White House on Aug. 24, 2022. (Alex Wong/Getty Images)

The administration also suggested in the filing that the Supreme Court could bypass the 8th circuit court and hear the case on an expedited basis, while also citing the national emergency declared due to the COVID-19 pandemic and provisions in the Heroes Act as justification for Biden’s executive decision to provide student debt relief.

But the GOP-led states—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—said in their filing that Biden’s request to lift the freeze is not justified by any “emergency or imminent harm” while lifting the injunction “risks unleashing on the States a wave of harms that could not be undone.”

The states also challenged the Biden administration’s rationale of using the COVID-19 pandemic as justification for the student loan wipeout scheme. They accused the Biden administration of relying “on the COVID-19 pandemic” as “a pretext to mask the President’s true goal of fulfilling his campaign promise to erase student-loan debt.”

The GOP-led states argued that the Biden administration is trying to connect the debt cancellation to the pandemic “by citing current economic conditions supposedly caused by COVID-19.”

“But those conditions are not directly attributable to the pandemic,” they said, arguing that the Biden administration has failed to adequately link the debt wipeout to a national emergency.

The states also pointed to a separate ruling by a federal judge in Texas that struck down Biden’s debt cancellation program, arguing that this would remain in place even if the Supreme Court sides with the Biden administration’s appeal to lift the freeze.

Biden Administration Extends Repayment Moratorium

The Biden administration announced on Nov. 22 that it will extend its moratorium on student loan payments through June 30, 2023, as the program to cancel hundreds of billions of dollars in loans faces several court battles.

After student loan payments were put on hold in early 2020 under the Trump administration due to the pandemic, payments were slated to resume on Jan. 1, 2023.

The Biden administration announced on Nov. 22 that it would extend the moratorium through June 30, 2023, as the program faces legal challenges in courts.

“We’re extending the payment pause because it would be deeply unfair to ask borrowers to pay a debt that they wouldn’t have to pay, were it not for the baseless lawsuits brought by Republican officials and special interests,” Education Secretary Miguel Cardona said in a statement, claiming the lawsuits filed against the debt program are “callous efforts.”

Interest rates will remain at zero percent until repayments start under the plan. Under an earlier extension announced in April, people who were behind on payments before COVID-19 lockdowns and stay-at-home orders would automatically be put in good standing.

Officials have said that around 26 million people already have applied for debt relief, and 16 million have been approved.

The debt forgiveness plan announced in August would cancel $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven, for a total of $20,000.

Multiple lawsuits filed by groups and states sought to block the program, and two of those challenges were successful. The Department of Education closed its loan cancellation website earlier in November and stopped accepting and processing applications following the court orders.

Jack Phillips contributed to this report.

Tom Ozimek
Tom Ozimek is a senior reporter for The Epoch Times. He has a broad background in journalism, deposit insurance, marketing and communications, and adult education.