Biden’s student loan forgiveness plan goes before the Supreme Court
Biden’s student loan forgiveness plan goes before the Supreme Court
The Supreme Court will hear arguments this week on Biden’s student loan forgiveness plan.
In a case that will ultimately decide whether about 43 million people get some or all of their federal student loans forgiven, the justices will decide the issue of whether the president has the authority to cancel $10,000 to $20,000 in student debt for most borrowers or not.
It’s been six months since President Biden made this much-anticipated announcement.
“We will forgive $10,000 in outstanding federal student loans,” Biden said in an August 24, 2022 press conference. “In addition, students who come from low-income families, which allowed them to qualify to receive a Pell Grant, will have their debt reduced $20,000.”
But almost as soon as he made that promise, legal challenges started cropping up from Republican-led states and a couple of borrowers.
Now, it’s up to the Supreme Court whether the more than 40 million people who would qualify for this debt cancellation will get it.
“We’re talking hundreds of billions of dollars in relief,” said Adam Minsky, an attorney who works with student loan borrowers. “Many of those borrowers would become completely debt free, others could have half or more of their balance completely wiped out.”
In other words, this is a big deal — for a lot of people.
“Even people who have much larger balances,” said Jane Fox, an attorney at The Legal Aid Society in New York. “They’re still equally as worried, I think, as people who know that they’re gonna get their total debt wiped out.”
“It’s really about the larger principle of, ‘Can we cancel student debt?’ Under what legal authority can we do it,” Fox said.
Whatever happens with this case, Betsy Mayotte at the nonprofit Institute of Student Loan Advisors likes to remind people who are anxious about their debt that “there are a multitude of lower payment options available on federal student loans.”
Mayotte said all the focus on broad student loan relief has overshadowed a lot of other major changes the administration has made to the student loan program.
“That has really taken the pressure off some of the most vulnerable borrowers — like totally and permanently disabled students that were defrauded by their schools — borrowers pursuing Public Service Loan Forgiveness…” she said.
Some of those changes, Mayotte said, may ultimately provide even more relief for people than the $10,000 to $20,000 of forgiveness currently before the Supreme Court.
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