The IS Supreme Court to hear arguments Tuesday in a pair of cases that could determine the fate of President Joe Biden’s student loan debt relief plan and have financial implications for millions of people with student loan debt and American taxpayers.
The justices will hear a pair of challenges to the student loan debt sheet, both of which will involve questions of whether the Department of Education was authorized by Congress to advance the rule implementing the Biden plan and whether follow the correct regulatory procedures. Apart from the statutory and regulatory aspects of the cases, Biden v. Nebraska whether six states have the constitutional standing to challenge the rule; The Department of Education v. Brown to see if two student loan borrowers have the standing to take on the challenge.
Biden’s student loan distribution plan it would cancel $10,000 in federal student loans for individuals making less than $125,000 a year or families earning less than $250,000 a year starting in 2020 or 2021. Pell Grant recipients — which typically represent greater financial need – an additional $10,000 in debt cancellation. The loans would have to be disbursed before July 1, 2022, to be eligible for the plan.
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About 43 million student loan borrowers are eligible under the plan, and nearly half of those would be canceled in their entirety. The Biden administration has said that there have been 26 million applications for relief so far and 16 million applicants have been approved pending the resolution of the court cases. The nonpartisan Congressional Budget Office has said it would cost taxpayers about $400,000,000,000 over the next three years if fully implemented.
Elaine Parker, president of the Job Creators Network, which filed suit on behalf of the two borrowers in Department of Education v. Brown, FOX Business’ Neil Cavuto that if the Supreme Court sides with Biden, it will “give not only this president but all future presidents a blank check to create programs of this magnitude without any input from Congress or the American people.” She added that “it will signal to colleges that they can continue to increase tuition for these students higher than the rate of inflation.”
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Biden has said he has the authority to wipe out student loan debt under a law originally enacted after the terrorist attacks of September 11, 2001. Known as the Higher Education Opportunity Relief for Students Act (HEROES ), the law was originally intended to benefit service members deployed to Afghanistan and Iraq by forgiving their student loan debt or providing other relief. The HEROES Act was enacted in January 2002, expanded and revised in 2003 and 2005, then made permanent in 2007.
Both the Trump and Biden administrations cited the legal authorities granted by the HEROES Act to pause student loan repayments due to the impact of the COVID-19 pandemic, although the Trump administration did not pursue a debt cancellation plan under its authority like the Biden administration. yes.
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Student loan repayments remain on hold until 60 days after the release of the Supreme Court ruling or 60 days after June 30 – whichever comes first. It’s possible that Biden could issue an additional extension to the refund break depending on the outcome of the case.
The nonpartisan Committee for a Responsible Federal Budget estimated that the reimbursement break costs the federal government $5 billion in lost revenue each month.
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Supreme Court justices are expected to issue rulings in student loan debt distribution cases later this year, with decisions expected before the current term ends in late June or early July.
Fox News’ Shannon Bream and Bill Mears contributed to this article.