Supreme Court again refuses to block Biden’s student loan bailout plan

Supreme Court nominee and U.S. Court of Appeals Judge Amy Coney Barrett on October 21, 2020, in Capitol Hill, Washington.

Ken Sedeno | Reuters

The Supreme Court on Friday denied a second request to block the Biden administration’s student loan debt relief program.

Judge Amy Coney Barrett urgent application to block a program brought in Tuesday by the Pacific Legal Foundation, a conservative legal group, for two borrowers in Indiana.

October 20th, Barrett Denied a similar request From the Brown County Taxpayers Association of Wisconsin.

Barrett has served on such petitions issued from cases in the Seventh Circuit Court of Appeals involving Indiana and Wisconsin.

Friday’s decision will have little practical effect. For now, student loan forgiveness remains pending. challenge Brought about by six Republican-led states. In October, an appeals court judge on the Eighth Circuit Court of Appeals granted the state’s emergency petition to stay the plan pending consideration of the state’s appeal.

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Since the White House in August announced The Plan — Canceling $10,000 Student Loans for Most Borrowers and Up to $20,000 for Recipients Pelgranz Low-income families face at least six lawsuits.

The White House said Thursday that nearly 26 million Americans have already applied for student loan forgiveness, and the Biden administration has approved 16 million applications. Despite recent challenges, the administration has continued to encourage borrowers to apply for relief.

“While we are disappointed by today’s denials, we will continue to fight this program in court,” Caleb Kruckenberg, an attorney at the Pacific Legal Foundation, said in an emailed statement.

“In effect, the administration has sought to avoid judicial scrutiny since the program was announced,” Kruckenberg said. “So far they’ve been successful. But that doesn’t change the fact that this program is illegal from bow to stern.”

‘Standing’ is Still a Problem for Forgiveness Challenges

Experts say the main obstacle for those trying to block the president’s actions is finding plaintiffs who can prove they’ve been harmed by the policy.

“Such injuries are necessary to establish what courts call ‘standing.'” lawrence tribeA Harvard law professor recently told CNBC. “No individuals, businesses, or states were clearly harmed, as private lenders would have been if, for example, student loans were cancelled.”

In that light, Barrett’s decision to deny the Pacific Legal Foundation’s request is not surprising, says higher education expert Mark Kantrowitz.

“There is little substantive difference between their original lawsuit and the new lawsuit, which implies a lack of legal status,” he said.

In the Pacific Legal Foundation lawsuit, Indiana-based plaintiffs Frank Garrison and Noel Johnson economically damaged Because if some of the student debt was automatically forgiven, there would be state taxes on that canceled debt.

Indiana is one of several states. It states that the pardon will be taxable at the state level, potentially county level.

Both Garrison and Johnson are attorneys. Garrison works for the Pacific Legal Foundation and Johnson works for the Public Interest Legal Foundation.they are seek relief through Civil Service Loan Forgiveness ProgramPeople who work for the government or certain non-profit organizations can write off their debts after 10 years or 120 payments. PSLF Forgiveness Not considered taxable income.

After the initial lawsuit, the Department of Education said borrowers could opt out if they didn’t want their loans forgiven.

Student loan borrowers are ‘dangling’

As legal troubles pile up, financial advisers say borrowers are wondering where the student loan forgiveness is.

Ethan Miller, a certified financial planner and founder of Planning for Progress in the Washington, DC area, said: Miller specializes in clients taking out student loans.

“We had a plan that clearly outlined the procedure,” he said. “Still, everyone is hanging in the air.”

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