SUPREME COURT BRIEF SUPPORTS FEDERAL STUDENT LOAN DEBT CANCELLATION PLAN THAT PROTECTS STUDENT BORROWERS

Attorney General Brown and Coalition Argue that the Biden Administration Acted Within Its Statutory Authority by Issuing Debt Relief to Borrowers Affected by COVID-19 Pandemic – Press Release Issued: 1/11/2023

Baltimore, MD – Maryland Attorney General Anthony G. Brown today upheld his commitment to assist families, and student loan borrowers avoid financial ruin caused by the inability to repay certain loan debt due to the COVID-19 pandemic. Attorney General Brown joined a coalition of 22 Attorneys General in filing an amicus brief in support of the federal government in two cases before the U.S. Supreme Court. The cases concern the Biden Administration’s targeted cancellation of student loan debt to address the continuing effects of the pandemic.

The brief, filed today in the cases Biden v. Nebraska and Department of Education v. Brown, argues that U.S. Secretary of Education Miguel Cardona has the authority, under the HEROES Act, to provide limited debt cancellation to prevent student loan borrowers from experiencing grave financial hardship because of the COVID-19 pandemic.

Last year, the Secretary 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 received a Pell Grant. This debt relief seeks to ensure that borrowers affected by the pandemic don’t face catastrophic defaults at the conclusion of a nearly three-year pause in loan repayment obligations.

The debt cancellation plan was challenged in 2022. The federal government is now asking the Supreme Court to lift injunctions granted by lower courts that blocked the Secretary from granting debt cancellation relief while the legal challenges were pending and to uphold the Secretary’s action.

“The Secretary of Education acted appropriately, and within his authority, when the Department proposed providing certain debt cancellation to student borrowers impacted by the global pandemic,” said Attorney General Brown. “The Secretary’s plan targets those most vulnerable to defaulting on their loans, which, if not prevented, could cause additional harm such as inability to obtain employment or housing.”

In its brief, the coalition argues that targeted debt cancellation is an appropriate and necessary use of the Secretary of Education’s authority under the HEROES Act. The brief emphasizes the ongoing financial harm that the pandemic has caused student borrowers and offers evidence that a spike in pandemic-related defaults is likely to occur when the current pause on student loan repayment ends.

The brief also argues that states have an interest in ensuring the well-being of their residents and that states benefit when residents are protected from suffering preventable harms stemming from student loan defaults that could jeopardize their job prospects, housing security, and access to some federal benefits.

Joining Attorney General Brown in the brief are the Attorneys General of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and Wisconsin.