How Biden is defending his student-loan forgiveness plan ahead of a federal hearing that could halt the policy this week

• A federal judge will hear arguments this week on blocking Biden's student-loan forgiveness.
• In response, Biden's administration filed its first legal defense of the policy.

This week could mark a turning point for President Joe Biden's student-loan forgiveness, as a federal judge will hear oral arguments from Republican-led states on whether to halt the debt relief.

Biden isn't too concerned with the lawsuit, per a new court filing.

Last week, Biden's administration filed its first legal defense of the student-loan-forgiveness plan it announced in August which would cancel up to $20,000 in debt for federal borrowers making under $125,000 a year. It's in response to a lawsuit filed by six Republican-led states last month who argued that the debt cancellation would hurt the states' revenues. They also said the authority does not exist under the HEROES Act — which the Biden administration is using to enact the relief — to carry out this policy.

Biden's administration wrote in the filing that the plaintiffs' argument "holds no water."

"While Plaintiffs may disagree with the Secretary's decision as a policy matter, Congress vested the Secretary — not these Plaintiffs — with authority to determine when and how special relief measures should be provided to federal student-loan borrowers affected by extraordinary circumstances such as the COVID-19 pandemic," the filing said. "This Court should not disturb that congressional grant of authority."

While at least three other groups have filed lawsuits attempting to block the debt relief, this appears to be the first case that is progressing and has yet to be struck down by a federal judge. Even if it doesn't prevail, it could delay the implementation of debt relief. Here are some of Biden's main arguments defending student-loan forgiveness and countering the Republicans' criticisms.

Republicans' claims are "neither concrete nor imminent"

In the lawsuit, the Republicans argued that MOHELA — a student-loan company based in Missouri where the lawsuit was filed — will face financial harm because it oversees Federal Family Education Loan, or FFEL, program loans, which are privately held loans guaranteed by the government.

They said that Biden's debt relief will create an "incentive to consolidate" into direct loans to qualify for federal forgiveness, but as the Biden administration noted in its filing, the Education Department updated its guidance at the end of September to note that FFEL borrowers cannot consolidate to qualify for relief.

Additionally, Biden's filing said that MOHELA can "sue and be sued in its own name," but the plaintiffs have not shown any concrete data reflecting harms to the company inflicted by debt relief. Each of the six states' concerns with lost tax revenue are "neither concrete nor imminent" because they could not specifically show losses to state tax revenues.

The HEROES Act authorizes targeted student-loan forgiveness

Biden has maintained he has the authority to cancel student debt under the HEROES Act of 2003, which gives the Education Secretary the ability to modify or waive student-loan balances in connection with a national emergency, like the COVID-19 pandemic — but the Republican plaintiffs said the loan forgiveness is an overreach of that authority.

In its court filing, the Biden administration detailed why that isn't the case. It wrote that similar to the pandemic payment pause — first implemented by former President Donald Trump — this targeted debt relief "falls squarely within the Secretary's discretion" to modify student-loan balances as a pandemic-relief measure. And while Republicans have claimed Americans do not need pandemic relief anymore, Biden's filing wrote that "the pandemic is an ongoing national emergency that, after more than two years, has left no aspect of daily life untouched."

While the plaintiffs in the case said the relief is too broad to fit within the HEROES Act and constitutes as "mass debt cancellation," Biden's defense says the relief is no such thing — it specifically targets borrowers making under $125,000 a year and does not cover the entire student-loan program.

Relief is needed to prevent delinquency and default on loans

If Biden were to restart payments in January without any relief, his defense argued, borrowers could fall behind, and default, on their loans at high rates, which is why this one-time targeted debt relief was warranted.

"The Secretary found that, absent action to reduce the threat of delinquency and default, student-loan borrowers at lower income levels face serious risks that, as they exit the pandemic and their loans go back into repayment, they will promptly be placed in a worse financial position with respect to their student loans — i.e., facing an immediate risk of delinquency of default that did not exist prior to the pandemic — than they would have been in the absence of the COVID-19 pandemic," the filing said.

That's why the department determined a targeted debt-relief plan to aid lower-income borrowers would prevent them from falling behind once payments resume next year.