Tuesday’s Supreme Court oral arguments for two student loan lawsuits may resolve the Biden administration’s promise to erase student loans.
In August, President Joseph Biden launched a scheme to forgive up to $20,000 in federal student loan debt for more than 40 million individuals. A federal court in Texas halted the program in November, declaring it unconstitutional. In October, the application period began.
Student Loan Forgiveness Program Update
In both Biden v. Nebraska and Department of Education v. Brown, the Supreme Court will determine whether the Department of Education’s student loan relief scheme exceeds its power and if the lawsuits have legal standing.
According to the White House, 26 million people applied for student loan forgiveness, and 16 million were approved prior to the program’s suspension.
Conservative groups and states have filed a lawsuit against the Department of Education about a month after Biden revealed his desire to eliminate student loan debt. This case has been dismissed by the federal courts. Two matters reached the Supreme Court.
Six states, led by Republicans, sued Biden v. Nebraska, arguing regulatory overreach and the loss of tax income caused by debt cancellation.
Initially, United States District Judge Henry Autrey dismissed the complaint because it lacked a legal basis. But, the Eighth Circuit Court of Appeals determined that Missouri has legal standing because the revenue loss of a loan servicer would be substantial.
Taylor and Brown filed a complaint against the Department of Energy. Taylor receives $10,000, while Brown receives nothing. In addition, they argue that the government did not follow the Administrative Procedure Act’s notice-and-comment procedure.
The Higher Education Relief Opportunities for Students (HEROES) Act of 2003 empowers the Department of Education to amend financial aid programs for students to assist borrowers during national emergencies.
The moratorium on student loans imposed by former President Donald Trump during the epidemic will last for several months. In Department of Education v. Brown, the plaintiffs contend that the Education Department lacks the jurisdiction to operate under the HEROES Act, which exempts programs from the notice-and-comment period.
The Education Department asserts its jurisdiction to implement its rescue plan because countless borrowers are at risk of defaulting on their student loans.
A senior administration official told TIME that our debt relief policy is vital to preventing defaults and delinquencies when student borrowers move back to payments following the payment halt.
A national emergency had an impact on millions of student borrowers. Due to this necessity, numerous borrowers risk not repaying their student debts. The HEROES Act gives the Secretary of Education the authority to avert this harm, which he is now undertaking.
The Constitutional Accountability Center, which filed an amicus brief on behalf of HEROES Act co-sponsor Rep. George Miller with the Supreme Court, agrees.
They claim that Congress intended to provide the Secretary of Education with extensive discretion and flexibility in order to shield student loan beneficiaries from military crises, national disasters, and any ‘unpredictable impediments that may arise.
Read more: Space travel for two without needing a billionaire’s fortune; Are you ready to join?
What Could Happen Next?
The Supreme Court, which is governed by conservatives, will not publish its decision for several weeks, but the exact schedule is unknown.
If the Supreme Court agrees with Biden’s scheme, applications would continue forward and a substantial amount of previously-approved People’s debt would be totally canceled.
Previously, legal experts told TIME that the future of student loan forgiveness is dubious due to the fact that applicants were not needed to establish financial hardship caused by the COVID-19 emergency.
Professor of law at Fordham University Jed Shugerman remarked that the only rationale for not having any step to prove causality or association from the emergency would be if the disaster was still occurring. The Biden administration announced in January that the COVID-19 national and public health emergency will end in May.
Due to the fact that many people are still infected with the virus, the Education Department believes it may implement its debt forgiveness program regardless of the existence of a national emergency.
In a brief filed with the Supreme Court, they argue that the HEROES Act authorizes the Secretary of Education to ensure that financial aid recipients who are affected by the financial aid are not placed in a worse financial situation.
Due to inflationary pressures and the possibility of high default rates when student loan payments resume, the brief claimed that the loan forgiveness program is justified.
If the Department of Education is denied permission to launch its debt forgiveness program and litigation regarding the program is not completed by June 30, student loan payments will resume 60 days later.
Read more: iPhone user alert: Thieves can easily reset your Apple account!
