Biden's Student Loan Debt Relief Plan Hangs in the Balance as Supreme Court Decision Nears
June 1, 2023
In a high-stakes battle, the Biden administration's ambitious plan to alleviate billions of dollars in student loan debt has faced numerous roadblocks, remaining entangled in legal proceedings, and awaiting the verdict of skeptical conservative justices on the Supreme Court.
As decision day draws closer, the fate of this transformative proposal becomes increasingly uncertain.
The stakes are undeniably high, with 43 million Americans eligible for up to $20,000 in debt relief.
The estimated cost of implementing the program exceeds a staggering $400 billion, which could cancel the remaining student loan debt for an estimated 20 million individuals.
Beyond its financial implications, the plan carries significant political weight for President Biden, who championed the cause of tackling student loan debt as a key promise during his 2020 campaign, aiming to galvanize younger voters.
However, Biden's debt relief plan faces a formidable hurdle in the form of a conservative-majority Supreme Court that harbors suspicions regarding broad assertions of executive power.
The Court's leanings cast doubt over the program's viability.
"We fought hard to get to this place, where the president has promised historic debt relief," Mike Pierce, executive director of the Student Borrower Protection Center, told NBC News.
"We are hopeful still the Supreme Court is going to rule on the side of people who have student debt, but we are also clear-eyed," said Pierce, whose advocacy group is dedicated to alleviating student loan debt.
Among the approximately 30 cases pending before the Supreme Court ends its current term in June, Biden's debt relief plan is a focal point. The high court's term traditionally concludes in the last week of June.
With a conservative majority of 6-3, the Court's deliberation on this matter is paramount for Biden and the millions the legislation affects.
The Court also plans to address various other significant issues, most notably an education-related dispute that could eliminate the consideration of race in college admissions.
In a January filing sent to the U.S. Supreme Court, the Department of Justice said it agreed with President Joe Biden's plan to forgive student loans.
A federal judge in Texas invalidated a program in October that would have helped 40 million people with their student loan debt.
Two people who didn't qualify for aid under Biden's scheme sued the initiative on behalf of the conservative Job Creators Network Foundation.
At the time, White House Press Secretary Karine Jean-Pierre said the government strongly disagreed.
"The President and this Administration are determined to help working and middle-class Americans get back on their feet, while our opponents, backed by extremist Republican special interests, have sued to prohibit millions of Americans from getting much-needed relief," Jean-Pierre remarked.
The HEROES Act of 2003, according to the White House, gives the Secretary of Education the authority to forgive student debt.
"The program is consequently an illegal exercise of Congress's legislative power and must be vacated," wrote a Donald Trump nominee, Judge Mark Pittman.
"In this country, we are not dominated by an all-powerful executive with a pen and a phone," he continued.
Biden's plan would forgive federal student loan debt of up to $10,000 for borrowers with yearly incomes less than $125,000 in 2020 or 2021 and up to $200,000 for married couples or heads of households.
Borrowers who also got a federal Pell Grant could see $20,000 in their loans discharged.
Six states with Republican governors sued to stop Biden's plan to forgive debts, an action that led to the 8th U.S. Circuit Court of Appeals putting the plan on hold.
One plaintiff in Texas lost her right to have her federal student loans forgiven because the federal government did not service her loans.
Since the other plaintiff did not obtain a Pell award, the amount of debt relief to which he is entitled is just $10,000.
They said they could not voice their disapproval of the program's regulations because the administration had not followed the Administrative Procedures Act's notice and comment rule-making procedure.
In its petition, the Justice Department said, "The lower courts' decisions have wrongly taken away the Secretary's legislative authority to give targeted student loan debt relief to borrowers affected by national emergencies."