Student loan forgiveness: Supreme Court to hear challenges to Biden plan on Tuesday

The U.S. Supreme Court will hear two cases Tuesday that challenge President Joe Biden’s student loan forgiveness plan.

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The cases are being heard by the court four months after the plan was put on hold by an appellate court judge. The justices have scheduled two hours of arguments in the case Tuesday. The public can listen in on the court’s website beginning at 10 a.m. EST.

Several lawsuits were filed challenging the legality of Biden’s plan to erase some or all the student loan debt amassed by more than 40 million people.

The plan announced on Aug. 24 would cancel $10,000 in federal student loan debt for those making less than $125,000 or households with less than $250,000 in income per year. Pell Grant recipients would get an additional $10,000 in debt forgiven.

The two suits challenging the program — Biden v. Nebraska and U.S. Department of Education v. Brown — were filed soon after the program was announced.

Biden v. Nebraska was brought by the attorneys general in Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina. The suit claims the president does not have the authority to dismiss student loan debt. It also claims that businesses that service federal loans would be harmed by the plan.

The suit was originally dismissed, but on an appeal, it was decided that the case could go forward.

In U.S. Board of Education v. Brown, a group called the Jobs Creators Network Foundation filed on behalf of student loan borrowers Alexander Taylor and Myra Brown. According to the suit, the two are suing because Taylor does not qualify for the full $20,000 and Brown does not qualify for any debt relief.

A federal district judge in that case declared the forgiveness program unlawful.

More than 26 million people have applied for loan relief. According to the Education Department, about 16 million applications have been approved. However, since the program was put on hold, the debts have not been canceled, nor is the program accepting any more applications.

The nonpartisan Congressional Budget Office said the program would cost roughly $400 billion over the next 30 years.

The Biden administration used the Higher Education Relief Opportunities for Students Act, the HEROES Act, to justify canceling the debt. The legislation was enacted after the Sept. 11, 2001, terror attack and was intended to keep members of the military from being affected financially while they fought in wars in Afghanistan and Iraq.

The act was extended to allow the secretary of education to waive or modify the terms of federal student loans as necessary in connection with a national emergency, The Associated Press reported. The national emergency cited by the Biden administration was the COVID-19 pandemic.

The justices will first decide if the states and the two borrowers have the right to sue over the plan, known as having “standing” in a case. They must prove they will be financially harmed to have standing.

If they don’t have standing, the Biden administration can move forward with the plan. However, that does not mean that other parties could not challenge the plan in court.

Supreme Court rulings are released before the end of the court’s session, usually at the end of June. However, the court can release the ruling any time it wishes or if the matter is time sensitive.

Student loan debt payments are scheduled to resume 60 days after the Education Department was allowed to implement the debt relief program or the litigation was resolved.

If there is no ruling by June 30, payments will restart 60 days later, on Sept. 1.