Biden’s student loan forgiveness plan faces challenge in federal court

Amna Nawaz:

President Biden's executive order to cancel student debt is facing its most serious legal challenge to date.

A federal judge in Missouri heard arguments today from six states hoping to block the plan from taking effect. To qualify for the student loan program, individuals must make less than $125,000 a year or $250,000 for married couples and families. Eligible borrowers can receive up to $10,000 in forgiveness or up to $20,000 if they are Pell Grant recipients.

White House correspondent Laura Barrón-López has been following it all. And she joins me now as part of our series Rethinking College.

Laura, good to see you.

 Laura Barrón-López:

Good to see you.

Amna Nawaz:

So let's talk about this case that was heard today in Missouri. What exactly are the states arguing?

Laura Barrón-López:

So there are six Republican states, including Nebraska, Missouri, Arkansas, and they're arguing that the administration's debt relief program is illegal on three fronts.

Those three fronts are that the administration lacks authority, that they did not follow administrative procedure, and that it harms state revenue. So, today, we spoke to Arkansas Attorney General Leslie Rutledge, and she really focused on whether or not the president has authority to do this and took direct aim at him.

Leslie Rutledge, Arkansas Attorney General:

The president did not have the authority to make this decision. He made this decision and based it on the HEROES Act, which essentially was put in place during the Iraq War in order to give relief to our brave men and women in uniform.

And it was also, as part of it, it could be used during a national emergency. Unfortunately, President Biden forgot that he declared the pandemic over a few short weeks ago.

 Laura Barrón-López:

As you heard Attorney General Rutledge there saying that she thinks the president doesn't have this authority, but what was interesting in the arguments today was that the Missouri judge, Henry Autrey, essentially really scrutinized that, saying, why is the president being sued as a part of this lawsuit and questioning whether or not the Republican states had standing against the president vs. standing against the Education Department and the education secretary.

Amna Nawaz:

So a main part of their argument is, the administration doesn't even have the authority to do this. What has the Biden administration been saying about this?

 Laura Barrón-López:

The Biden administration is essentially saying that they were granted this authority under a 2003 higher education law, also known as the HEROES Act.

And so, today, Deputy Assistant Attorney General Brian Netter argued that the pandemic gives them this authority.

Brian Netter, U.S. Deputy Assistant Attorney General:

It's crucial here that this is a statute about emergencies. It's a statute about national emergencies. And it seems hard to fathom that Congress wouldn't have understood at the time that a larger national emergency is going to prompt and necessitate a larger action by the secretary of education.

 Laura Barrón-López:

And so, essentially, Netter is saying that, as the economic hardships were growing due to the COVID pandemic, so does the power of the education secretary, Miguel Cardona. Those powers grow as well. They grow with it.

And he specifically argued against this front that the states were bring forward, saying that these national — this national emergency statute only applies to specific military activity, it applies to military members, service members. An Netter said, no, historically, that's not the case under this law, that, look, when you think about a hurricane, government doesn't provide relief just when the hurricane is spinning.

He said that, after a national emergency happens or national disaster like that, that the government has to help people come out of that, come out of the economic hardships or the infrastructure hardships that are brought upon by national emergencies.

Amna Nawaz:

Laura, what about the whole racial equity part of this? We heard the Biden administration message that as an underpinning to why they were rolling out this loan forgiveness plan. They said it would especially helped Black borrowers.

How does that factor into their argument?

 Laura Barrón-López:

So, the states today were saying, this is only going to provide relief to wealthy individuals, to higher-income individuals.

And what the administration essentially is saying back is that, well, you have to look at actually who the borrowers are for these loan programs. And for the loan forgiveness program, it would significantly impact Black borrowers. Specifically, the average debt for Black borrowers is 10,000, more than for white borrowers. Also, Pell Grant recipients are twice as likely to be Black.

Now, another big piece of this is the Federal Family Education Loan borrowers, which was at first a part of the announcement when the administration said they were going to provide this big cancellation of debt. Then they ended up taking that out of the guidance, saying that these borrowers would not provide — would not be given this relief.

And that was a big piece of this lawsuit, because, essentially, the states are arguing that they get state revenues from the companies that take on that — those loans from those borrowers. But the government is saying that, ultimately, the relief provided to these borrowers is — far outweighs the state revenue that would ultimately be lost.

Now, again, on the FFEL borrowers, the Federal Family Loan borrowers, the administration has tried to make clear that, while they may not receive relief now, that, ultimately, the Education Department is trying to find an alternative pathway for them.

Amna Nawaz:

Well, for anyone who can get any relief, they have to fill out an application. We have been anticipating the release of that application form from the White House.

What do we know about that?

 Laura Barrón-López:

So, they just issued a preview of this application form this week, the White House did, and, essentially what borrowers have to do, they have to give Social Security numbers, their date of birth, their e-mail.

But they also have to click this box that certifies, under penalty of perjury, that they meet the income thresholds. Now, some of those borrowers will be provided — just based on that certification, will be provided relief. Others are going to have to show more proof that they meet those income thresholds that you outlined earlier.

Now, I spoke to White House Assistant Press Secretary Abdullah Hasan today. And he said that, essentially, as the lawsuit is proceed — as the lawsuits are proceeding, because there's more than just the one we talked about today, that the White House is going to still move forward with implementing this plan.

Now, no relief is going to be felt prior to October 23. But the application process is going to be rolled out this month.

Amna Nawaz:

So folks can check that out and start to apply if they are eligible.

White House correspondent Laura Barrón-López following it all, thank you so much.

 Laura Barrón-López:

Thank you.