How would student loan borrowers know if they were really getting relief?
Millions of student loan borrowers are in the lurch, waiting to see if they will actually receive the relief proposed by President Biden as challenges to his debt relief plan wind their way through the courts.
The Biden administration opened applications for student loan forgiveness last month and had planned to begin applying the relief this month, but those actions were halted after the U.S. Court of Appeals for the 8th Circuit temporarily blocked the measure.
Of the multiple court cases across the country, a six-state GOP-led challenge is the only one so far successful in halting 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. However, the 8th Circuit issued an order two weeks ago to prevent the aid from being distributed while it considers arguments about whether the states have standing to sue 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 program directly harmed their states.
The Eighth Circuit eventually paused the relief program to give both sides time to file their briefs before making a full decision on whether the pardon should be paused until the entire case is resolved.
Abby Shafroth, director of the National Consumer Law Center’s Student Loan Borrower Assistance Project, said The Hill’s borrowers “will have a decision” from the 8th Circuit soon after those briefs have been filed.
Legal experts say the court’s decision on whether the states have standing could be key to whether the administration is allowed to provide aid in the weeks or months from now, if at all.
Michael Sant’Ambrogio, a law professor and senior associate dean for faculty and academic affairs at Michigan State University, said a decision on the states’ request for a preliminary injunction should be made soon, but litigation is “rarely quick” if the entire case ends at trial.
“If they grant a preliminary injunction, I’d say all bets are off,” he said.
Biden said this in an interview with Nexstar’s Reshad Hudson last week he expected the aid to be paid within two weeks, but experts say this is only possible if the ban is rejected.
Sant’Ambrogio said the Supreme Court has increasingly reduced the executive branch’s authority to take action without clear direction from Congress, and the states’ challenge could succeed on the argument that Congress never expressly authorized a broad pardon.
“This is a very bold move by the administration, and there are certainly some questions with how the Supreme Court interprets executive and federal agency powers,” Sant’Ambrogio said.
While Shafroth acknowledged that litigation could take a long time, she doesn’t expect challenges against student debt relief to last too long or for the courts to halt the program while they rule.
She said it was “unusual for courts to order a party to do or not do something before deciding the case”.
“Normally, a judge would have to 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 appeal to repeated failed attempts by Congress to write off the debt as evidence of a lack of congressional authority to act on the administration.
If the appeals court decides that the states have standing and issues a temporary injunction, their submissions on the merits of the case it shouldn’t arrive 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 lead to the case going into next year.
The COVID-19 pandemic-era break for borrowers paying off their loans was set to end on Dec. 31, but the Biden administration could seek to extend it again. The administration urged borrowers to apply for the relief by mid-November to ensure they get it in time for the break to end.
“It’s hard for me to imagine this ending in less than a month. “It could potentially be two or three months before the ban is finally lifted,” said Thomas Bennett, associate professor of law at the University of Missouri. “And of course, if the appeals courts were to agree with the states that they have the power, then it could be much longer.”
He said either side could appeal the eventual 8th Circuit ruling to the Supreme Court on an expedited basis, adding that the higher court is more likely to take it if the federal government loses at the appeals court level.
He said the Supreme Court is more likely to take up cases challenging the program if multiple appeals courts issue different rulings on the program’s constitutionality.
Shafroth noted that the Supreme Court had already declined to get involved in one case related to 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 to be correct. on Friday when Judge Amy Coney Barrett emergency attempt denied to block the pardon program in the Garrison case.
“It remains to be seen whether any of the other cases will go to the Supreme Court,” Shafroth said.
Bennett, in response to Biden’s prediction, said, “It’s not likely that there will 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 likely if they are able to win,” he added, referring to the administration.
Although Shafroth said it is difficult to determine an exact time frame for when this could be resolved in the courts, she said she does not expect a long time frame for decisions.
“The parties are very clearly, on both sides, interested in a quick resolution of these cases, so they agree to quick briefing schedules. And the courts recognize the great importance of these cases and resolve them quickly,” she said.
“I think hopefully everything should be resolved pretty quickly,” Shafroth said.
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