U.S. Supreme Court Associate Justice Amy Coney Barrett on Friday again declined to block President Joe Biden’s plan to cancel billions of dollars in student debt, this time in a challenge brought by two Indiana borrowers, as a lower court considers whether to lift a freeze it imposed on the program in a different case.
Barrett denied an emergency request by the Indiana borrowers, represented by a conservative legal group, to bar the U.S. Department of Education from implementing the Democratic president’s plan to forgive debt held by qualified people who had taken loans to pay for college.
Barrett on October 20 denied a similar request by a Wisconsin taxpayers organization represented by another conservative legal group. The justice acted in the cases because she is the justice assigned to handle certain emergency requests from a group of states that includes Indiana and Wisconsin.
Biden’s plan, unveiled in August, was designed to forgive up to $10,000 in student loan debt for borrowers making less than $125,000 per year, or $250,000 for married couples.
Borrowers who received Pell Grants to benefit lower-income college students would have up to $20,000 of their debt canceled.
The policy fulfilled a promise Biden made during the 2020 presidential campaign to help debt-saddled former college students. Democrats hope the policy will boost support for them in Tuesday’s midterm elections in which control of Congress is at stake.
The St. Louis-based 8th U.S. Circuit Court of Appeals on October 21 put the policy on hold in yet another conservative challenge by six Republican-led states while it considered their request for an injunction pending their appeal of their case’s dismissal. That request remains pending.
Two borrowers, Frank Garrison and Noel Johnson, represented by the conservative Pacific Legal Foundation, filed Friday’s case, contending they would be irreparably harmed if some of their student loans were automatically forgiven because they would face increased state tax liabilities.
Soon after they sued, the Education Department created an opt-out option for borrowers. U.S. District Judge Richard Young on October 21 dismissed the case, finding that the debt forgiveness program did not injure Garrison and Johnson.
The Chicago-based 7th U.S. Circuit Court of Appeals on October 28 declined to block the plan while Garrison and Johnson pursued an appeal, noting that the program is “not compulsory” and that the plaintiffs could avoid tax liability simply by opting out.
The nonpartisan Congressional Budget Office in September calculated that debt forgiveness would eliminate about $430 billion of the $1.6 trillion in outstanding student debt and that more than 40 million Americans would be eligible to benefit.