Big Moment For Student Loan Forgiveness Is Just Around The Corner

The saga of President Biden’s signature one-time student loan forgiveness initiative is about to enter the next phase, as the Supreme Court prepares to hear oral arguments next week to decide the fate of the program.

Here’s the latest.

Supreme Court Hearing on Biden’s Student Loan Forgiveness Program is Next Week

Last year, Biden announced an unprecedented one-time initiative to enact mass student loan forgiveness. Under the program, up to 40 million borrowers could receive up to $20,000 in cancellation of government-owned federal student loans. Over 26 million borrowers had applied for debt relief, and over 16 million were approved, before 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 on February 28th. In one case, a coalition of Republican-led states is arguing that the Biden administration’s one-time debt relief program would deprive states of revenue by encouraging borrowers with commercial FFELP loans, which are guaranteed by some state-affiliated organizations, to consolidate those loans into the government’s Direct lending program. In the other case, a conservative-leaning organization representing two student loan borrowers has argued that the Biden administration acted arbitrarily in how it established program eligibility, and violated federal rules governing the issuance of new regulations.

The Biden administration has maintained that the program is legal and was established properly under federal rules that allow the Education Department to respond to national emergencies, such as the Covid-19 pandemic. In a legal brief filed with the court last month, Justice Department attorneys argued that, “Several provisions of the HEROES Act [of 2003] underscore Congress’s intent to authorize the Secretary to respond quickly and fully to national emergencies... The lower courts’ orders have erroneously deprived the Secretary of his statutory authority to provide targeted student-loan debt relief to borrowers affected by national emergencies.”

The administration has also argued that the challengers have failed to establish that they have “standing” to sue — meaning they are unable to demonstrate a concrete injury sufficiently related to Biden’s debt relief plan. Attorneys for the administration, and allies who have submitted supporting briefs, argue that the link between Biden’s program and state revenues is tenuous at best.

All of these arguments will come to a head at next week’s hearing. The issue of standing could prove critical, as the program could be upheld even if the Supreme Court justices question its ultimate legality if they determine that the challengers are unable to demonstrate that they have standing. The comments and questions made by the justices during the hearing may reveal how they are leaning, and could provide clues about how the Court will ultimately rule.

Groups Planning Demonstration Supporting Student Loan Forgiveness to Coincide with Court Hearing

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

Many of these organizations filed amicus curiae briefs with the Supreme Court last month, urging the justices to uphold the Biden initiative. “The briefs represent the breadth of communities that stand to benefit from student debt relief, including working people, borrowers of color, veterans, older people, people of faith, along with cities and states across the country,” said the Student Borrower Protection Center (SBPC) in an earlier statement. “Together, these briefs showcase the broad support, strong legal foundation, and urgent economic necessity underpinning President Biden’s effort to cancel student debt for 40 million Americans.”

What’s Next for Borrowers Seeking Student Loan Forgiveness

While the Supreme Court could issue a decision at any point after next week’s hearing, it is widely expected that the decision will be released in June. In the meantime, the Biden administration has extended the ongoing student loan payment pause to 60 days after either June 30 or the date that the Supreme Court issues a ruling.

Further Student Loan Forgiveness Reading

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