Biden’s student loan plan likely headed to Supreme Court as millions of borrowers await relief


Joe Biden
President Joe Biden speaks about the student debt relief portal beta test as Education Secretary Miguel Cardona listens in the South Court Auditorium on the White House complex in Washington, Monday, Oct. 17, 2022. (AP Photo/Susan Walsh) Susan Walsh/AP

Biden’s student loan plan likely headed to Supreme Court as millions of borrowers await relief

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President Joe Biden‘s costly plan to assist millions of student loan borrowers is much more likely to face Supreme Court scrutiny after a Monday federal appeals court decision marked the latest blow to the debt forgiveness program.

A three-judge panel on the 8th U.S. Circuit Court of Appeals in St. Louis issued a preliminary injunction and blocked the program in one of several cases challenging the loan relief plan, which is estimated by the Congressional Budget Office to cost nearly $400 billion over the next three decades.


“It’s still temporary,” financial aid and student loan researcher Mark Kantrowitz told the Washington Examiner, adding that the plan will remain frozen “until the appeals court rules or until it’s appealed to the Supreme Court.” The plan was temporarily halted on Oct. 21, before the appeals court extended the hold this week until the issue is resolved in court.

Cases that pose the biggest threat to Biden’s forgiveness plan

The ruling on Monday was in response to a lawsuit led by Republican states including Nebraska, Iowa, Kansas, Missouri, Arkansas, and South Carolina to block the debt relief plan. The panel of judges who decided on the case included three Republican appointees, one by former President George W. Bush and two by former President Donald Trump.

On Thursday, U.S. District Judge Mark Pittman, a Trump appointee based in Fort Worth, Texas, responded to a separate lawsuit declaring the plan “unlawful.” Pittman found that Higher Education Relief Opportunities for Students Act of 2003, also known as the HEROES Act, did not provide the authorization for the loan forgiveness program despite the Biden administration maintaining the law provides the legal justification.

White House press secretary Karine Jean-Pierre has said appeals are forthcoming in both decisions while contending the administration strongly believes it can relieve debt for some 43 million borrowers eligible for the program.

“The Administration will continue to fight these baseless lawsuits by Republican officials and special interests and will never stop fighting to support working and middle-class Americans,” Jean-Pierre said.

The toughest hurdle for challengers is still legal standing

Since Biden announced the loan forgiveness program in August ahead of the midterm elections, the administration has been hit with a growing tally of legal challenges. Supreme Court Justice Amy Coney Barrett already has twice rejected emergency appeals from separate cases.

One challenge denied by the Supreme Court came from a Wisconsin taxpayers’ group, in which a lower court judge previously dismissed the case after finding the group didn’t have the legal authority, or standing, to present the case. This facet will likely play a key role in the final decision over the legality of Biden’s plan.

Supreme Court precedent holds that taxpayers generally don’t have legal standing to bring a challenge against a federal program just because they disagree with it, Kantrowitz noted, adding that a decision in favor of challengers would “open the door to Pandora’s box” to an onslaught of lawsuits.

“So they’re not going to issue a ruling that changes the standards for someone who has legal standing or waives the requirement that there be legal standing,” Kantrowitz said.

The Texas case and the lawsuit filed by the six GOP-led states are likely to be appealed to the Supreme Court. Beforehand, the lawsuits will be heard separately by the 5th and 8th Circuit appeals courts, both of which have a majority of Republican-appointed judges on the bench.

The appellate courts will not have the final say on the validity of the program, rather, they will decide if the plan can move forward while challenges proceed.

White House weighing potential ‘Plan B’ approach

The Department of Education temporarily suspended the reception of new applicants for the forgiveness plan on Nov. 1 in response to courts blocking the program.

Meanwhile, some White House aides have privately discussed the prospects of extending the freeze on loan payments after Jan. 1, citing the legal holdups the program has faced. Biden himself has not signaled whether to extend the payment pause, confidential sources told the Washington Post this week.

White House officials declined to comment to the Washington Examiner.

Kantrowitz contends if the litigation “drags on for more than another few weeks, they’re probably going to need to do an extension while the cases are still pending.”

And if the forgiveness plan were to be defeated in a permanent way, Kantrowitz said the administration could focus on its “Plan B,” noting the president could extend the payment pause and interest waiver “indefinitely.”

“The Republicans are probably going to take over the House,” Kantrowitz noted, adding they “could hold lots and lots of hearings, but they couldn’t do anything to block the actions of the Biden administration.”

The moratorium on loan payments began in 2020 under Trump’s administration as a relief to borrowers due to the economic strain of the pandemic and was extended three times by the former president to a total of four times into the Biden administration.

Brian Riedl, a policy analyst at the Manhattan Institute, a libertarian-leaning think tank, told the Washington Examiner that recent court decisions and responses from the White House show “that they’re not confident the student loan bailout is going to survive in the courts and they’re using a resumption or continuation of the moratorium as a backup plan.”

Still, Riedl said extending the moratorium is an “even worse policy,” noting it too would benefit the wealthiest borrowers who are capable of making loan payments.


On Tuesday, the nonprofit organization Committee for a Responsible Federal Budget released a statement calling on the administration to resume payment requirements after Dec. 31, warning that further postponement “would cost an additional $120 billion,” disproportionately benefit high-income households, and increase the risk of recession.

Biden’s plan aims to forgive $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Meanwhile, Pell Grant recipients would receive an additional $10,000 in debt forgiveness.

© 2022 Washington Examiner

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