Big Moment For Student Loan Forgiveness Is Just Around The Corner

The President Biden signing saga unique student loan forgiveness initiative is about to enter the next phase, as the Supreme Court prepares to hear oral argument next week to decide the fate of the program.

Here is the latest.

Supreme Court hearing on Biden’s student loan forgiveness program to take place next week

Last year, Biden announced an unprecedented, unique move to enact a massive student loan forgiveness. Under the program, up to 40 million borrowers could receive up to $20,000 in government-owned federal student loan forgiveness. More than 26 million borrowers had applied for debt relief, and more 16 million have been approvedbefore the federal courts shut down the initiative last fall in response to multiple legal challenges.

The Biden administration has appealed those rulings, and the Supreme Court has scheduled what is sure to be a blockbuster hearing for February 28. In one case, a coalition of Republican-led states argues that the Biden administration’s one-time debt relief package would starve states of revenue by incentivizing borrowers with FFELP commercial loans, which are backed by some state-affiliated organizations to consolidate these loans. in the government’s direct lending program. In the other case, a conservative-leaning organization representing two student borrowers argued that the Biden administration acted arbitrarily in the way it determined eligibility for the program and violated federal rules governing the release of new regulations.

The Biden administration has argued that the program is legal and was properly established under federal rules that allow the Department of Education to respond to national emergencies, such as the Covid-19 pandemic. In a legal case filed with the court last month, Justice Department lawyers argued that “several provisions of the HEROES Act [of 2003] underscore Congress’s intent to authorize the Secretary to respond promptly and fully to national emergencies…Lower court orders wrongly stripped the Secretary of his statutory authority to provide targeted student debt relief to affected borrowers by national emergencies.

The administration also argued that the challengers have failed to establish that they have “standing” to sue – meaning they are unable to demonstrate concrete harm sufficiently tied to the relief plan. of Biden’s debt. Administration lawyers and allies who have submitted supporting briefs argue that the link between Biden’s agenda and state revenue is tenuous at best.

All these arguments will come to an end at the hearing next week. The question of standing could prove critical, as the program could be upheld even if Supreme Court justices question its ultimate legality if they determine that the challengers are unable to demonstrate that they have standing. Comments and questions made by judges during the hearing may reveal their bias and could provide clues as to how the Court will ultimately rule.

Groups plan demonstration in favor of student loan forgiveness to coincide with court hearing

Advocacy groups for student borrowers are plan an event next week, the same day as the hearing. Dubbed the “People’s Rally for Student Debt Cancellation,” several civil rights, consumer protection, and labor organizations are encouraging people to attend. Rally co-sponsors include the American Federation of Teachers (AFT), Center for Responsible Lending (CRL), Debt Collective, MoveOn, NAACP, National Consumer Law Center (NCLC), and National Education Association (NEA) .

Many of these organizations deposit court friend briefs with the Supreme Court last month, urging the justices to support the Biden initiative. “The submissions represent the breadth of communities that stand to benefit from student debt relief, including working people, borrowers of color, veterans, seniors, believers, and cities and states across the country,” the Student Borrower Protection Center said. (SBPC) in an earlier statement. “Together, these briefs show the broad support, strong legal basis, and urgent economic necessity that underpins President Biden’s efforts to cancel student debt for 40 million Americans.”

What’s next for borrowers applying for student loan forgiveness

Although the Supreme Court can issue a ruling anytime after next week’s hearing, the ruling is widely expected to be released in June. Meanwhile, the Biden administration has extended the current student loan payment break 60 days after June 30 or the date the Supreme Court renders a decision.

Further Reading on Student Loan Forgiveness

Republican senators introduce bill to end student loan suspension and stop loan forgiveness

Student loan update: Big interest changes are coming

Student loan forgiveness: Biden administration update form for new, simpler bankruptcy process

Student Loan Forgiveness: These Deferment and Forbearance Periods May Count