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Biden asks Supreme Court to allow student loan forgives program to proceed

Student Loan Forgiveness
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WASHINGTON (AP) — The Biden administration asked the Supreme Court to reinstate the president's student debt cancellation plan.

The administration is fighting to keep the plan alive after it was halted by two federal courts in recent weeks. The Justice Department is asking for quick action to allow the plan to take effect.

The petition with the Supreme Court concerns a lawsuit filed by six Republican-led states. It seeks to overturn an injunction by a federal appeals court in St. Louis

The White House said it's also prepared to file an appeal in the case out of Texas, where a judge blocked the plan.

Biden has promised $10,000 in federal student debt forgiveness to those with incomes of less than $125,000, or households earning less than $250,000. Pell Grant recipients, who typically demonstrate more financial need, are eligible for an additional $10,000 in relief.

Keeping the debt relief on hold would leave the government with a tough choice. If it restarts student loan payments as planned on Jan. 1, millions of Americans will get billed for debt that was promised to be canceled. But if the government extends the payment pause, it will cost billions of dollars in lost revenue.

The argument has been made in numerous filings by the government this week, warning that many Americans won't be able to pay their student debt bills in January if the cancellation plan remains halted.

For typical borrowers, monthly payments would be $200 to $300 higher than they would be if Biden’s plan goes through, the Education Department said. The strain could lead to soaring default rates, which have increased by an average of twentyfold in the wake of other natural disasters.