Millions of student borrowers find themselves on hot coals, waiting to see if they will actually get the relief offered by President Biden as challenges to his debt cancellation plan wind their way through the courts.
The Biden administration opened applications for student loan forgiveness last month and planned to begin applying the relief this month, but those actions stalled after the U.S. Court of Appeals for the 8th circuit has temporarily blocked the measurement.
Of the multiple court cases across the country, a six-state GOP-led challenge is the only one that has succeeded so far in stopping the program, at least for now.
The administration plans to forgive up to $10,000 in federal student loans for borrowers earning less than $125,000 a year and up to $20,000 for Pell Grant recipients. But the 8th Circuit issued an order two weeks ago to stop the relief distribution while it considers arguments over whether states have standing to pursue the plan.
A federal district judge previously ruled that the six Republican attorneys general who sued lacked standing because they could not show that Biden’s agenda directly harmed their states.
The 8th Circuit ended up suspending the relief program to give both sides time to submit their briefings before making a full decision on whether the pardon should be put on hold until the entire matter is settled. .
Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, told The Hill that borrowers “will have a decision” from the 8th Circuit soon after these briefings are submitted.
Legal experts said the court’s decision on whether the states have standing could be key to determining whether the administration will be allowed to grant aid in the coming weeks or months, if at all.
Michael Sant’Ambrogio, law professor and senior associate dean for faculty and academic affairs at Michigan State University, said a decision on the states’ motion for a preliminary injunction is expected soon, but litigation is “rarely quick” if the full case goes to trial.
“If they grant the preliminary injunction, I would say all bets are off,” he said.
Biden said in an interview with Reshad Hudson of Nexstar last week that he expected the aid to be paid within two weeks, but experts said this is only possible if the injunction is refused.
Sant’Ambrogio said the Supreme Court has increasingly curtailed the power of the executive branch to act without clear direction from Congress, and that the states’ challenge could succeed based on the argument that Congress is not never expressly endorsed a broad pardon.
“This is a very bold move on the part of the administration, and there are certainly questions given how the Supreme Court interpreted the power of the executive branch and federal agencies,” Sant’Ambrogio said.
While Shafroth acknowledges that court cases can take a long time, she doesn’t expect student debt relief challenges to last too long or courts to halt the program while they decide.
She said it was “unusual for courts to order a party to do or not do something before a case has been decided”.
“Normally a judge would find that the government is breaking the law before ordering them to stop,” Shafroth said.
The six states that sued — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — pointed in their lawsuit to Congress’ multiple failed attempts to cancel the debt in recent years. as evidence of a lack of congressional authorization for the administration’s action.
If the Court of Appeal decides that the States have standing and grants the preliminary injunction, their pleadings on the merits of the case would not be due until mid-December. The government would then have 30 days to respond, and the states would have an additional 21 days to respond to that rebuttal, which would almost certainly result in the case being opened next year.
A COVID-19 pandemic-era pause on borrowers making payments on their loans is set to end Dec. 31, but the Biden administration may seek to extend it again. The administration had urged borrowers to apply for relief by mid-November to ensure they receive it in time for the break to end.
“I find it hard to imagine that all of this will be over in less than at least a month. It could be two or three months before the injunction is finally lifted,” said Thomas Bennett, associate professor of law at the University of Missouri. “And of course, if the appellate courts agreed with the states that they have standing, it could be a lot longer.”
He said each side could appeal a potential 8th Circuit ruling to the Supreme Court on an expedited basis, adding that the High Court may be more likely to take it if the feds lose at the appellate level. .
He said the Supreme Court may also be more likely to take up cases challenging the program if multiple appeals courts issue different rulings on the program’s constitutionality.
Shafroth pointed out that the Supreme Court had previously declined to get involved in a case involving the debt relief program, Brown County Taxpayers Association v. Biden, and she didn’t expect them to get involved in Garrison v. Department of Education – a prediction that proved correct on Friday when Judge Amy Coney Barrett refused an emergency effort to block the pardon program in the Garrison case.
“It remains to be seen whether any of the other cases will make it all the way to the Supreme Court,” Shafroth said.
Bennett, in response to Biden’s prediction, said, “There is unlikely to be any real loan forgiveness in the next two weeks.”
“But in the next four weeks, in the next six weeks, I think it becomes more and more plausible if they are able to win,” he added, referring to the administration.
Although Shafroth said it was difficult to pinpoint exactly when this might be resolved by the courts, she said she did not expect a long delay in decisions.
“The parties are very clearly, on both sides, interested in resolving these cases quickly, so they agree to fast briefing times. The courts also recognize the great importance of these cases and resolve them quickly,” she said.
“I think hopefully it will all be resolved fairly quickly,” Shafroth said.