What the Supreme Court Arguments Mean for the Future of Student Loans

A A majority of Supreme Court justices expressed doubt over whether the Biden Administration’s student loan forgiveness plan is legal in back-to-back oral arguments on Tuesday.

Members of the court heard two cases, ie. Biden v. Nebraska and Department of Education v. Brownin which the justices asked questions meant to assess whether the lawsuits had legal standing and whether Biden was violating executive authority to cancel up to $20,000 in student loan debt for about 40 million borrowers.

The judges asked mainly ideological questions, although Amy Coney Barrett suggested that she might change to support the Biden program in light of her doubts about the arguments that the state of Missouri had to advance the case on behalf of the financial debt that could be a MOHELA loan servicer. . Even if she has faults, however, that is not enough to make a majority.

The bottom line, experts say, is that student loan forgiveness appears likely to be denied based on the Supreme Court’s desire to limit executive power.

“Other than Barrett, I haven’t heard another conservative focus on this in a way that shows this is an issue we’re struggling with,” says Jed Shugerman, a professor who studies executive branch powers at Fordham Law School.

What did the judges ask

Oral arguments began with a question from Justice Clarence Thomas, who echoed a common theme among conservative justices: whether there was a clear provision in the Higher Education Relief Opportunities for Students (HEROES) Act that allowed the Secretary of the Department of Education to offer . this program. The HEROES Act is the legal basis for Biden’s student loan forgiveness plan. It allows the Secretary of Education to “waive or modify any statutory or regulatory provision” related to student financial aid programs to ensure that those affected by a national emergency are not placed “in a worse financial position.” In this case, that emergency is the COVID-19 pandemic.

Chief Justice John Roberts later called attention to the “great questions doctrine,” which requires agencies to have clear authorization from congress when deciding on issues of national importance. The language of the HEROES Act is quite broad, which some leftist judges, like Justice Elena Kagan, have pointed to as clear authority to recommend loan forgiveness.

The conservative justices also questioned whether the student loan relief program was “fair” to borrowers who had already paid off their loans, or to the millions of Americans who decided not to pursue higher education. The line of questioning was built based on the complainants behind it Department of Education v. Brown, who are suing because they say they were unfairly exempt from some loan forgiveness. (Myra Brown, one of the plaintiffs, is not entitled to any relief, and Alexander Taylor is only entitled to $10,000 instead of the $20,000 given to Pell Grant recipients). They also argue that the program did not have a notice and comment period, which would have allowed them to confirm broader loan relief.

Judge Ketanji Brown Jackson appeared to dismiss the question of fairness, saying the same reasoning could be applied to any federal benefit program. “I’m thinking about the fact that, as a result of COVID-19, we’ve been given massive infusions of money to various companies (and) organizations, which were clearly authorized because of what Congress said to do,” Jackson said. “I’m wondering if that would be unfair to people who didn’t have a company or someone who wasn’t … non-profit and wasn’t getting that money. I don’t know how far we can go with this notion.”

What is at stake?

The ruling would affect young Americans like 28-year-old Ramy Ahmed, who is one of the 16 million people approved by the Department of Education for loan forgiveness. None of those borrowers got help because of the legal challenges. Ahmed currently has about $30,000 in student loans, and up to $20,000 could be wiped out if Biden’s loan relief plan goes ahead.

Although Ahmed considers himself lucky to work in a high-paying profession as an account executive, he says he is barely scratching the surface when it comes to paying off his loans. “I am currently at an age where I am trying to develop a financial nest egg. And if I just have to pay more out of pocket every month… that’s just going to make the other financial decisions I make more difficult,” Ahmed tells TIME.

Experts such as Genevieve Bonadies Torres, associate director of the educational opportunities project at the Lawyers Committee for Civil Rights Under Law, warn that people of color will disproportionately feel the consequences of the Supreme Court striking down Biden’s loan relief plan.

“The compounding effects of these harms will mean that groups will not be able to get on the right footing for a thriving economy and the educational opportunities they need and deserve,” Torres tells TIME. “It will lead to the worsening of the racial disparities, that we are both rooted in a pandemic and also before the pandemic.”

Cases during this term are usually resolved around June and July, but since the judges decided to expedite the loan forgiveness cases, an opinion could be released before then.

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