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Taxpayer group asks Supreme Court to halt student debt program

The long-shot appeal comes days after the Biden administration opened up applications for debt relief

Student loan borrowers stage a rally in front of the White House in August to celebrate President Joe Biden canceling student debt.
Student loan borrowers stage a rally in front of the White House in August to celebrate President Joe Biden canceling student debt. (Paul Morigi/Getty Images for We the 45m)

A taxpayer group asked the Supreme Court on Wednesday to pause a Biden administration program to cancel up to $20,000 in federal student loan debt for millions of borrowers, days after the launch of online applications.

The group of taxpayers from Brown County, Wis., wants the Supreme Court to prevent any loans from being forgiven while their challenge to the program case plays out in lower courts.

The long-shot appeal is the first of what could be numerous Supreme Court bouts over the student loan forgiveness program, which could impact millions of federal borrowers. A central issue is whether the group has the legal right to file a legal challenge to the program.

The taxpayers argued the Biden administration’s program supplanted Congress’ authority to dictate spending, since it uses a law meant to help military personnel and first responders as “a warrant to transfer hundreds of billions, or perhaps over a trillion, dollars in debt onto taxpayers.”

“There is no legal justification for this presidential usurpation of the constitutional spending power, which is reserved exclusively for Congress,” the brief states.

The case is one of several launched by objectors to the student loan program, including debt servicing companies, Republican-led states and others.

President Joe Biden announced the launch of the application portal in a White House event Monday, although he acknowledged the program may face legal challenges.

“Litigation is underway,” Biden said. “Our legal judgment is that it won’t, but they are trying to stop it.”

Administration officials said more than 8 million people had applied for forgiveness during a beta testing period starting last week.

The Biden administration announced the program in August after more than a year of pressure from members of his party to cancel as much as $50,000 of student loan debt.

The administration’s forgiveness program would top out at $20,000 for Pell Grant recipients and $10,000 for other federal borrowers. To qualify, individuals must have earned less than $125,000 or household income less than $250,000 in 2020 or 2021.

More than 43 million borrowers would be impacted by the program, with about 20 million having their debt entirely forgiven, the administration said.

The Wisconsin taxpayers are represented by the conservative Wisconsin Institute for Law & Liberty.

A federal district court judge dismissed the group’s initial appeal, ruling that such a taxpayer group lacked the legal right to file a legal challenge. The Brown County group then appealed the dismissal to the U.S. Court of Appeals for the 7th Circuit, which also denied a stay of the forgiveness program during the appeal.

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