Supreme Court Tackling a Big Case: Student Loans

On Tuesday, justices will hear arguments on whether Biden's loan forgiveness is legal
By John Johnson,  Newser Staff
Posted Feb 27, 2023 9:35 AM CST
Supreme Court Tackling a Big Case: Student Loans
Light illuminates part of the Supreme Court Building on Capitol Hill in Washington in this file photo.   (AP Photo/Patrick Semansky, File)

The Supreme Court on Tuesday will hear arguments in a closely watched case—actually two cases—that will have a tangible effect on the bank accounts of many Americans. The issue is whether President Biden's plan to give people a break of up to $20,000 on their federal student loans is legal. If the initiative goes through, millions of people would see their student loans reduced or even eliminated, reports Insider. The justices are expected to issue a ruling on the case in June. Coverage:

  • Challenge I: Six Republican-led states (Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina) say the Biden administration overstepped its authority. A big (and complicated) question is whether the states have the proper standing to sue at all, and the New York Times digs in. It's not enough to argue the Biden White House overreached—the states must show that they would suffer "direct and concrete injuries" from the plan, per the Times. And though Biden faces a court with a strong conservative majority, the dynamics are complicated: Back in 2007, right-leaning justices John Roberts, Samuel Alito, Antonin Scalia, and Clarence Thomas objected to the loosening of the standards under which states could bring such suits.

  • Challenge II: In addition to the suit by the states, two student borrowers have sued as well, reports the AP. Myra Brown is ineligible for relief under the Biden plan because her loans are commercially held. Alexander Taylor is eligible for only $10,000 of the possible $20,000 because he didn't get a Pell Grant. They argue the Biden administration put the plan into place without giving the public the required amount of time to weigh in, among other things.
  • The relief: If the plan goes through, it would cancel $10,000 in federal loan debt for those who make less than $125,000. Those who received Pell Grants (these are typically borrowers with greater need) would get an additional $10,000 in relief.
  • Justification: The White House says it can forgive the student debt under the 2003 Higher Education Relief Opportunities for Students Act, or HEROES. Enacted around the time of the Iraq War, it gives the education secretary the authority to modify loan rules in a war or national emergency, per the Washington Post. In this case, the White House says the COVID pandemic qualified because it wreaked havoc on people's ability to make payments. (Those payments are currently on pause until the matter is resolved legally.)
  • Key question: "It's unclear whether the lawmakers actually foresaw the attempted use of HEROES to justify a blanket cancellation plan at the time the law was passed, but in retrospect, both parties seem to vehemently disagree about what was originally intended," writes Beth Akers at the Hill. "Now, it will be up to the nine Supreme Court justices to decide."
(Read more student loans stories.)

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