Coalition Argues That the Biden Administration Acted Within Its Statutory Authority by Issuing Debt Relief to Borrowers Affected by the COVID-19 Pandemic
Chicago – Attorney General Kwame Raoul today filed an amicus brief supporting the federal government in two cases before the U.S. Supreme Court concerning the Biden administration’s targeted cancelation of student loan debt to address the continuing effects of the COVID-19 pandemic. In doing so, Raoul joined a coalition of 22 attorneys general in arguing that the debt relief program is lawful and appropriate.
Last year, U.S. Secretary of Education Miguel Cardona announced plans to grant $10,000 in debt relief for borrowers under certain income thresholds, and $20,000 in debt relief to borrowers who met those income thresholds and also received a Pell Grant in college. This debt relief seeks to ensure that borrowers affected by the pandemic do not face catastrophic defaults at the conclusion of a nearly three-year pause in loan repayment obligations.
“Higher education should be within reach for all Illinoisans without the fear that they will be saddled with lifelong debt,” Raoul said. “For millions of student loan borrowers, the struggle of making loan payments has been exacerbated by the COVID-19 pandemic’s economic impact. The U.S. Department of Education’s targeted relief plan could keep many from defaulting once the current pause in payments has ended.”
The debt cancelation plan was challenged in September and November 2022 in Biden v. Nebraska and Department of Education v. Brown, respectively. The federal government is now asking the Supreme Court to lift injunctions granted by the lower courts that blocked the secretary from granting this debt cancelation relief during the pendency of the legal challenges and to uphold the secretary’s action.
The amicus brief, filed by Raoul and the coalition today, argues that Secretary Cardona has the authority under the HEROES Act to provide limited debt cancelation to prevent student loan borrowers from experiencing grave financial hardship as a result of the COVID-19 pandemic. The brief emphasizes the ongoing financial harm that the pandemic has caused student borrowers and the evidence that a spike in pandemic-related defaults is likely to occur upon lifting of the current student loan repayment pause. The brief describes the catastrophic financial impacts such pandemic-related defaults would have on borrowers and how those impacts would also harm state economies. Raoul and the coalition argue that the federal government appropriately granted relief that was targeted to prevent these outcomes and that the secretary acted well within his authority under the HEROES Act in using debt cancelation as a tool for responding to pandemic-related harms.
The brief also argues that states have an interest in ensuring the well-being of their residents, explaining that state economies benefit when residents are protected from suffering preventable harms stemming from student loan defaults that could imperil their job prospects, housing security and access to some federal benefits.
Joining Raoul in filing this brief are the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and Wisconsin.