Connect with us

Hi, what are you looking for?


Student Loan Debt in the Balance: The Supreme Court Considers the Fate of Loan Forgiveness Programs

Student Loan Debt in the Balance: The Supreme Court Considers the Fate of Loan Forgiveness Programs
Prior to Tuesday's oral arguments, hundreds of protestors demonstrated outside the Supreme Court. (Photo: Getty Images)

A Biden administration plan to erase billions in student loan debt has been questioned by conservative justices on the US Supreme Court.

The idea, which called for forgiving up to $10,000 (£8,310) per borrower and $20,000 in some circumstances, was unveiled by President Joe Biden last year, but lower courts stopped it.

Student Loan Debt in the Balance: The Supreme Court Considers the Fate of Loan Forgiveness Programs

Outside the Supreme Court, students demonstrate over debt. (Photo: Getty Images)

While the nation’s highest court deliberates over two legal challenges, millions more borrowers are in limbo.

More than 40 million Americans’ student loan debt could be impacted by the ruling. This includes approximately 20 million Americans, who may have their whole student loan debt amounts wiped, according to White House estimates. The lawsuits will receive a final decision from the conservative-majority 6-3 Supreme Court in June.


Read Also: Supreme Court to Hear Student Loan Forgiveness Challenges


According to the Biden administration, a 2003 law known as the Heroes Act gave it the authority to “waive or amend” student loan debt terms in order to help borrowers who were impacted by “a war or other military operation or national disaster”.

The government attorneys were pressed during Tuesday’s oral arguments about that expansive reading of the legislation.

“43 million Americans and $500 billion are at issue here. How does that fit into the definition of modified as we usually use it?” Elizabeth Prelogar, the US Solicitor General, was questioned by Chief Justice John Roberts.

According to Mrs. Prelogar, “modify” in this context could mean making significant adjustments to protect borrowers. She continued by saying that the administration’s goal was to develop a benefits program rather than exercise regulatory authority.

“Defaults and delinquencies will soar” if the strategy isn’t in place, she said.

The outcome of the two court lawsuits hinges on the ability of those who oppose the loan forgiveness scheme to show how the program will hurt them. If so, they would be entitled to file a lawsuit to stop the plan’s implementation in its existing form.

The first lawsuit involves a protest from six states with Republican governors, including Missouri.

Plaintiffs in the first lawsuit contend that because it would no longer be receiving millions of dollars in fees for student loan debt forgiven by the program, Missouri’s federal loan servicer, the Missouri Higher Education Loan Authority (Mohela), will suffer financially.

Why the states brought the lawsuit rather than Mohela was a question raised by Justice Elena Kagan.

Two student loan borrowers, Myra Brown and Alexander Taylor, are parties to the second action. Both Ms. Brown and Mr. Taylor were ineligible for forgiveness and the $20,000 maximum.

Conservative justices centered their discussion on whether it was proper for some Individuals to receive student loan debt relief while others did not. Justice Samuel Alito posed the following question: “How is it just? Why was it just to the ones who didn’t receive relief that was presumably comparable?”


Read Also: Student Loan Forgiveness Cancelled: To Pay Again This Summer


Yet, the court’s liberal judges resisted. Judge Sonia Sotomayor highlighted that “different people obtained different benefits because they qualified under different programs”, while Biden appointee Ketanji Brown Jackson asserted “the same fairness issue would emerge with respect to any federal benefit programs”.

Due to the coronavirus epidemic, student loan debt repayments were initially suspended during the Trump administration in 2020.

Mr. Biden maintained that hold-off until he made the decision in August to forgive more than $400 billion in student loan debt, up to $10,000 for each person making less than $125,000 and up to $20,000 for students receiving need-based Pell Grants.

In accordance with the White House’s plan, about 90% of the nation’s student loan borrowers will be eligible for relief, and about 26 million people have already applied for forgiveness. As a result of legal challenges to the scheme, however, relief is on wait.

Hundreds of activists demonstrated outside the Supreme Court in Washington, DC on Monday and Tuesday in the cold and rain in advance of the hearing.

Several of the most vocal members of the Democratic Party on the subject of student loan debt joined them. Congresswoman Ayanna Pressley stated opponents of student loan debt forgiveness were “disconnected from the struggle of real folks” while Senator Elizabeth Warren said “an extremist court” may take away the ability “to construct more secure futures”.


When will student loan debt payments start up again?

If the Supreme Court rejects the White House’s proposal, the White House has not said what it will do. Mr. Biden stated on Monday that “assured that the necessary legal authority exists to carry out that strategy. I’ll always have your back, I swear “.

If the court rejects the plan, the government will probably be forced to start over and come up with a revised strategy, which could take months. Even if the court rules in favor of the government, more legal challenges can still be brought.

That indicates that time is running out for many borrowers. While the nation’s pandemic emergency measures are still in effect, loan repayments are on hold. Nevertheless, if objections to the student loan debt relief plan are not removed by the end of June, installments will start again 60 days later.


Read More:

Student Loan Forgiveness In Court Under Biden Administration Allows Debt Discharge Through Bankruptcy

Social Security Insolvent: Romney Puts Financial Pressure to Biden’s Budget Chief

Biden’s Budget Plan – College to be More Accessible for All Americans

Copyright © 2022 Pro Claimers. Theme by MVP Themes, powered by The Santa Clarita Valley.