By Nate Raymond
(Reuters) -U.S. Supreme Court Justice Amy Coney Barrett on Friday again declined to block President Joe Biden's plan to cancel billions of dollars in student debt, this time in a challenge brought by two Indiana borrowers, even as a lower court considers whether to lift a freeze it imposed on the program in a different case.
Barrett denied an emergency request by the Indiana borrowers, represented by a conservative legal group, to bar the U.S. Department of Education from implementing the Democratic president's plan to forgive debt held by qualified people who had taken loans to pay for college.
Barrett on Oct. 20 denied a similar request by a Wisconsin taxpayers organization represented by another conservative legal group. The justice acted in the cases because she is the justice assigned to handle certain emergency requests from a group of states that includes Indiana and Wisconsin.
The St. Louis-based 8th U.S. Circuit Court of Appeals on Oct. 21 put the policy on hold in yet another conservative challenge by six Republican-led states while it considered their request for injunction pending their appeal of their case's dismissal. That request remains pending.
Biden's plan, unveiled in August, was designed to forgive up to $10,000 in student loan debt for borrowers making less than $125,000 per year, or $250,000 for married couples. Borrowers who received Pell Grants to benefit lower-income college students would have up to $20,000 of their debt canceled.
The non-partisan Congressional Budget Office in September calculated that debt forgiveness would eliminate about $430 billion of the $1.6 trillion in outstanding student debt and that more than 40 million Americans would be eligible to benefit.
The policy fulfilled a promise Biden made during the 2020 presidential campaign to help debt-saddled former college students. Democrats hope the policy will boost support for them in Tuesday's midterm elections in which control of Congress is at stake.
Friday's case was filed by two borrowers, Frank Garrison and Noel Johnson, represented by the conservative Pacific Legal Foundation, and claimed they would be irreparably harmed if some of their student loans were automatically forgiven because they would face increased state tax liabilities.
Soon after they sued, the Department of Education created an opt-out option for borrowers. U.S. District Judge Richard Young on Oct. 21 dismissed the case, finding that the debt forgiveness program did not injure Garrison and Johnson.
The Chicago-based 7th U.S. Circuit Court of Appeals on Oct. 28 declined to block the plan while Garrison and Johnson pursued an appeal, noting that the program is "not compulsory" and that the plaintiffs could avoid tax liability simply by opting out.
Caleb Kruckenberg, a lawyer at the Pacific Legal Foundation, in a statement expressed disappointment that Barrett declined to block the plan while his clients pursued their appeal but said they will "continue to fight this program in court."
"Practically since this program was announced, the administration has sought to avoid judicial scrutiny," he said. "Thus far they have succeeded. But that does not change the fact that this program is illegal from stem to stern."