The evening before the Supreme Court was scheduled to hear oral arguments regarding the Biden administration’s student loan forgiveness program, Amanda Smitley sat outside the court clutching an umbrella while perched on an aluminum blanket.
She didn’t know that it would be pouring rain the night she planned to camp out in front of the highest court, but that didn’t stop her.
“I feel great,” said Smitley, who is 20 years old and in his second year of college at PennWest California. He already owes around $10,000 in student loans. If she wants to finish school and become a high school history teacher, she will have to borrow more money.
Smitley said, “I care a lot about student debt, and not just for myself.” “I want to live in a world where my future students and maybe my own kids don’t have to worry about going thousands of dollars into debt just to go to college.”
Two people will ask the court not to forgive them.
Even though it was cold, borrowers showed up in front of the Supreme Court on Monday to show their support for the student loan forgiveness program. More than 35 million people with student loans could get up to $20,000 of their debts wiped out because of the policy. If it were done, it would wipe out about $400 billion in debt.
But the student loan forgiveness program hasn’t happened yet because in the fall, a federal appeals court panel in St. Louis put a temporary hold on it. The Supreme Court has kept the injunction in place while it looks into challenges to the plan. In November, the government stopped accepting applications for the student loan forgiveness program on its own.
On Tuesday, the Supreme Court will hear two separate cases about President Joe Biden’s plan to help people with their debt.
The first was filed in federal court in Missouri by six Republican-led states. It says that the Biden administration did not have the legal right to student loan forgiveness program without permission from Congress.
The second lawsuit, filed by Myra Brown and Alexander Taylor in U.S. District Court in Texas, says that they and other members of the public were wrongly denied the right, under federal rules, to make formal comments on the student loan forgiveness program, which could have changed its design before it went into effect.
The plaintiffs in that case are being helped by the Job Creators Network Foundation, which is a conservative group.
Experts say that the debt relief plan is likely to be ruled illegal by the court’s six-justice supermajority if one or more of the plaintiffs in the two cases has the legal right, called “standing,” to file a lawsuit against the program.
“This is a matter of life and death for many people.”
John Runningen was also going to sleep outside the Supreme Court on Monday night. He had taken out a student loan forgiveness program. He goes to Minnesota State Community and Technical College and owes $5,000.
Already, that debt has made his life harder.
Runningen, who is 22 years old, said, “It’s kept me from getting a car, moving out of my parents’ house, and helping my parents deal with the stress of their bills.”
As the first person in his family to go to college, he wanted to end the cycle of poverty and help his parents. His mother works at a gas station and his stepfather farms. But he won’t be able to help them because he has to pay $175 each month for his student loans.
“It might not seem like a lot of money to some, but for people in rural areas or poor areas, it could mean the difference between being able to feed my family or pay my electric bill,” Runningen said.
Within three weeks of the application process opening, the Biden administration said that more than 26 million people had applied for the student loan forgiveness program, and 16 million of those requests were approved.
There is no example in U.S. history of the kind of large-scale student loan forgiveness program that the White House has promised. However, consumer advocates point out that the government has helped large corporations and banks get out of trouble in the past. And they say that getting rid of a lot of student loans is necessary to help the many borrowers who are having trouble because of a broken lending system.
Before Covid, people who took out student loans had trouble paying them back. Mark Kantrowitz, an expert on higher education, thinks that only about half of the people who took out loans were making payments in 2019. A quarter of them, or more than 10 million people, were behind on their payments or in default, and the rest had asked for temporary help like deferments or forbearances.
People compared these sad numbers to the mortgage crisis in 2008, which put more pressure on Biden to help.
“For many people, this is a matter of life and death,” said Thomas Gokey, one of the people who started the Debt Collective, a national group of people who owe money. “At stake is having to choose between paying for student loans under student loan forgiveness program and buying food, paying rent, and paying medical bills.”