A second attempt to block Biden's student-debt cancellation lands at the Supreme Court
- Two student loan borrowers, represented by the conservative Pacific Legal Foundation, are asking the Supreme Court to step in and block student loan relief.
- The borrowers claim they will face a hefty tax bill for unwanted relief.
- The suit was dismissed by a lower court and now an appeal is headed to the high court.
Opponents to President Joe Biden's student-debt relief took their legal battle to the Supreme Court on Tuesday in the latest attempt to get the nation's highest court to block the plan.
Indiana student-loan borrowers Frank Garrison and Noel Johnson are seeking to halt the program, claiming it's unlawful and requires them to pay more in taxes because the debt cancelation is considered taxable income under state law.
"The administration is attempting to erase half a trillion dollars in debt without any legal basis," Caleb Kruckenberg, an attorney at the Pacific Legal Foundation, a conservative law firm representing the two applicants, said in a statement. "The Court ought to put the brakes on this lawless action while it's considered by the courts."
The emergency matter was filed to Associate Justice Amy Coney Barrett, who handles issues arising from the 7th US Circuit Court of Appeals. It comes less than two weeks after she dismissed a similar bid from a Wisconsin taxpayers' group to block the program.
Biden's plan has not yet taken effect because of a separate legal fight, in which the 8th US Circuit Court of Appeals temporarily paused implementation while a challenge brought by six Republican-led states is still being litigated. This means that the Education Department cannot actually cancel any student debt for borrowers at this time, but it encourages borrowers to continue applying for relief through the online form as it awaits a final decision from the court on the legality of the plan.
The policy aims to cancel $10,000 for federal borrowers earning less than $125,000 and $20,000 for Pell Grant recipients earning less than $125,000.
Pacific Legal Foundation was the first major group to file a lawsuit against relief in September. Their original claim rested upon the fact that Frank Garrison — an attorney at the group — would see $20,000 of his loan debt forgiven automatically. Garrison was making payments through the Public Service Loan Forgiveness (PSLF) program, and expected to qualify for full forgiveness in four years.
Instead, under the Biden administration's plan, Garrison claims he would see his debt relieved automatically — and incur a hefty tax bill, since his home state of Indiana plans on taxing relief. Noel Johnson, another plaintiff added to the amended complaint, is in a similar boat.
On September 29, the plaintiffs' request for a preliminary injunction was denied by the Southern District of Indiana District Court, and on October 21, the court dismissed the plaintiffs' amended complaint.
The Biden administration rebuked the original lawsuit by clarifying that any borrower could opt out of relief if they wanted to.
"The claim is baseless for a simple reason: No one will be forced to get debt relief. Anyone who does not want debt relief can choose to opt out," Abdullah Hasan, White House assistant press secretary, said in a previous statement to Insider on the original lawsuit. "Why would this group bring this baseless claim? Because opponents of the debt relief plan are trying anything they can to stop this program that will provide needed relief to working families."
The White House did not immediately respond to a comment on the appeal to SCOTUS.
In the filing, Pacific Legal Foundation argues that, despite the suit getting shot down multiple times, Johnson and Garrison satisfy the requirements for a preliminary injunction against relief. They argue that the case is time sensitive, and that there's no reason for the Education Department to rush into relief.
"Respondents are poised to enact a transformational policy with profound political and economic reach on the flimsiest of statutory pretexts," the motion says.
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