U. S. Justice Department Backs Biden on Students Debt
2023.01.05 00:24
U. S. Justice Department Backs Biden on Students Debt
Budrigannews.com – Two cases lacked standing to challenge the debt relief, according to a brief filed late on Wednesday by the United States Justice Department in support of President Joe Biden’s plan to cancel billions of dollars in federal student loans.
In August, Biden stated that borrowers earning less than $125,000 per year—or $250,000 for married couples—would receive up to $10,000 in federal student loan debt forgiveness. The plan would forgive up to $20,000 in debt for students who received Pell Grants for lower-income college students.
Two legal challenges have halted Biden’s centerpiece plan, which fulfills his 2020 campaign promise to assist young Americans struggling with debt. One comes from six mostly Republican-led states that claim the Biden administration overstepped its authority, while the other is based in Texas and argues that the public should have been allowed to comment.
Up to 40 million people, according to the Biden administration, are eligible for the assistance, which gives them the funds they need to buy a car, a house, or start a family. Republicans claim that the plan, which is estimated to cost about $400 billion, will increase inflation, which reached 9% last summer but has since decreased slightly.
Biden extended COVID-era temporary relief for borrowers until August, allowing time for the court cases to be resolved, and stated in November that he was confident that the plan is legal.
According to the Justice Department’s brief, Education Secretary Miguel Cardona was clearly authorized by the Higher Education Relief Opportunities (HEROES) Act of 2003 to offer borrowers debt relief. The act was also utilized by the previous Trump administration, according to sources familiar with the filing.
After the events of September 11, 2001, the HEROES Act granted the secretary of education the authority to modify any provision of the laws governing student aid programs in order to alleviate difficulties brought on by national emergencies.
Cardona said in a statement, “We remain confident in our legal authority to adopt this program.” We will do everything in our power to assist borrowers in overcoming the pandemic.”
The legal arguments, according to one of the sources, were “very strong… and should prevail before the court.”
Without assistance for borrowers with lower incomes, the brief predicted, default and delinquency rates would rise above pre-pandemic levels. One of the sources stated that homeowners were also experiencing “acute inflationary pressures.”
The Missouri Higher Education Loan Authority (MOHELA) could not challenge the ruling on behalf of Missouri because it is completely independent of the state and any harm to it would not harm the state, according to the brief.
According to one of the sources, MOHELA had publicly declared its independence from the state and distanced itself from the lawsuit.
In a separate Texas lawsuit, two borrowers argued that they could challenge the plan because the Education Department had not allowed public comment before finalizing it. The Justice Department also rejected this argument. According to the brief, the department was specifically exempt from notice and comment procedures under the HEROES Act.
Both cases have been expedited by the 6-3 conservative majority of the Supreme Court for oral arguments in late February or early March, with a decision expected by the end of June.
Millions more have applied for debt relief, and over 16 million borrowers have already been approved. The White House claims that borrowers who have not completed their education and earn less than $75,000 per year will receive nearly 90% of the benefits.
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