Can Biden forgive student debt post-COVID emergency?
By FOCUS, a Leonine Business
Last Friday, President Joe Biden announced that he plans to end the national emergency concerning the COVID-19 pandemic on May 11. By letting the coronavirus public health emergency expire, several powers the federal government has tied to the emergency will also end. One federal policy that hangs in the balance is President Biden’s student-loan forgiveness plan.
The Biden Administration announced its plan in August to forgive $10,000 for federal student loan borrowers and $20,000 for Pell Grant recipients, following through on a major priority of the Biden campaign. The program, however, has been stalled by lawsuits and after officially being blocked by the 8th U.S. Circuit Court of Appeals in Texas, has moved on to the Supreme Court.
The Supreme Court will hear two cases on February 28 challenging the loan forgiveness program: Biden v. Nebraska and Department of Education v. Brown. Biden v. Nebraska was brought on behalf of six states, Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina, reports CNN Politics. This case specifically asks whether the student-loan forgiveness plan exceeds the Secretary of Education’s statutory authority or is arbitrary and capricious. On the other hand, Department of Education v. Brown was brought by two individual borrowers, also from Texas, who do not qualify for full debt relief forgiveness and were not given the chance to comment on the proposal.
One immediate implication of the end of the COVID-19 declarations is that the payment pause on student loans can no longer be extended, which it has been several times since March 2020. The payment pause is currently in effect until June 30, with payments scheduled to resume 60 days following.
An even bigger implication lies in the Biden Administration’s legal justification for student loan forgiveness. The HEROES Act of 2001, which both challengers take issue with, authorizes the Department of Education to “waive or modify” provisions of a student-loan program to allay financial distress “in connection with a national emergency.” If the act requires a real connection to a national emergency, and that national emergency is ending, it is likely to make the Supreme Court even more suspicious of the legal justification, reports the SCOTUS Blog.
FOCUS will continue to monitor the student-loan forgiveness cases and how the results are bound to be seen in state legislatures.
