Supreme Court Agrees to Hear Student Loan Forgiveness Case in February

The Supreme Court will ultimately decide whether billions of dollars in federal student loan debt can be forgiven under President Joe Biden’s plan.
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  • Six Republican-led states filed a lawsuit hoping to block debt forgiveness in September.
  • After a series of appeals, the U.S. Supreme Court has agreed to take up the case in February.
  • A ruling is expected by June.

The Supreme Court on Thursday agreed to hear oral arguments in February in a case that has blocked President Joe Biden's federal student debt forgiveness plan.

The president's proposed debt cancellation plan has met multiple legal challenges and been blocked by one federal appeals court.

The Supreme Court on Thursday said that the program will remain blocked until it hears arguments in a lawsuit brought by six Republican-led states. In that case, filed in late September, Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina allege that Biden's plan to wipe out wide swaths of student debt will cost them revenue from servicing loans and taxes. They also claim that the Department of Education (ED) doesn't have the authority to carry out the plan.

A district court judge later tossed the lawsuit, ruling that the six states didn't have standing to sue. However, an appeals court in late October sided with the plaintiffs, blocking Biden’s program and causing ED to yank the online application for debt forgiveness.

Biden last month extended a pause on federal student loan payments to July 2023. At the time, he said the extension would allow the Supreme Court time to make a ruling in the case.

The Supreme Court's decision is expected by June.

In the meantime, the 8th Circuit Court of Appeals’ injunction blocking the program remains in place.

ED stopped accepting applications for loan forgiveness in early November due to the mounting legal troubles surrounding the program. More than 26 million borrowers had applied for debt cancellation at the time, while 16 million applications had already been approved and sent to loan servicers to be discharged if and when the courts allow it, ED Secretary Miguel Cardona said.