Since the Biden administration announced a student debt forgiveness plan in August, the plan’s status has been up in the air. Now, President Joe Biden has taken it to the Supreme Court.
In particular, a lawsuit from six conservative-led states (Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina) has slowed down the process to relieve debt.
According to CNN, the states argued that Biden’s student loan debt relief plan “violates the separations of power and the Administrative Procedure Act, a federal law that governs the process by which federal agencies issue regulations.” While a district court held that the states didn’t have the legal right to oppose it, the 8th Circuit Court of Appeals reversed the decision.
“Hardworking Americans who did not take on this debt should not be forced to shoulder this burden,” said Arkansas Attorney General Leslie Rutledge Oct. 21.
A fact sheet released by the White House in August said the goal of the plan is to cancel up to $20,000 of student debt for low- to middle-income borrowers. According to the U.S. Department of Education, this debt relief is estimated to cost an average of $30 billion a year over the next decade.
In an appeal of the 8th Circuit’s decision, the Biden administration said that the program “is necessary to ensure that delinquency and default rates among these borrowers would not spike above pre-pandemic levels.”
Even before the pandemic, student loan debt in the U.S. had spiraled into a $1.7 trillion crisis. This is in part due to the fact that college costs have tripled since 1980, while federal support has failed to keep up.
“That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree,” said the White House. “According to a Department of Education analysis, the typical undergraduate student with loans now graduates with nearly $25,000 in debt.”
Although college is supposed to help people build a career, and hopefully healthy finances, this debt has negatively impacted the financial situation for many graduates. It has also prevented others from even finishing a degree.
“We strongly disagree with the District Court’s ruling on our student debt relief program,” said White House Press Secretary Karine Jean-Pierre in a statement earlier this month. She said that, as of Nov. 10, 26 million borrowers had already given the Department of Education the necessary information to be considered for debt relief and 16 million had already been approved.
“The Department will hold onto their information so it can quickly process their relief once we prevail in court,” Jean-Pierre said.
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