Supreme Court questions Biden's ability to forgive student loans

Joe Biden
Posted at 7:24 AM, Feb 28, 2023

The Supreme Court heard arguments for and against President Joe Biden’s plan to forgive student loan payments for millions of borrowers.

The question before the Supreme Court was whether the administration can forgive these loans without Congressional authorization.

Several justices asked about whether the plan was fair to those who already paid back their loans or found alternative ways to pay for their education.

The question the Supreme Court posed to opponents of the plan was whether they hold the legal standing to formally object to the order.

The state of Missouri argued that its state-run student loan servicer MOHLEA would lose if loans are forgiven.

According to government figures, 26 million borrowers applied for forgiveness before the government stopped processing applications. Of those, 16 million were approved for forgiveness. The administration estimated that 40 million in total would be eligible for forgiveness.

President Biden's plan calls for borrowers with incomes of up to $125,000 to receive up to $10,000 in federal student loan forgiveness. That amount increases to $20,000 for borrowers who received Pell Grants.

In November, federal courts ruled the Biden administration could not move forward with forgiveness. The Biden administration has since appealed the decision and has taken the case to the Supreme Court.

In the meantime, federal student loan payments remain on pause until at least June, pending the Supreme Court’s decision.

The Supreme Court’s decision likely won’t come for several more months.

Proponents of student loan forgiveness point out the rising cost of education in recent decades. The cost of tuition at a public four-year university in 2020-21 averaged $9,400, up from $8,500 from a decade earlier, when adjusted for inflation.

Government data show that in the last three decades, the cost of attending a public university, which is generally far more affordable than a private one, has doubled, when adjusted for inflation. In the last 40 years, the cost has tripled.

A student attending a public university from 2017-21 would be expected to pay $38,093 in tuition and mandatory fees, in 2021 dollars. A person who attended a public university in 1977-81 would have been expected to pay $10,335 in 2021 dollars.

Opponents say Biden’s plan is too costly. The Congressional Budget Officesaid the cost for the government to forgive student loans is an estimated $400 billion.

The administration is expected to argue that the HEROES Act can be applied to pass student loan forgiveness.

“The HEROES Act, first enacted in the wake of the September 11 attacks, provides the Secretary broad authority to grant relief from student loan requirements during specific periods (a war, other military operation, or national emergency, such as the present COVID-19 pandemic) and for specific purposes (including to address the financial harms of such a war, other military operation, or emergency),” wrote Secretary of Education Miguel Cardona. “The Secretary of Education has used this authority, under both this and every prior administration since the Act’s passage, to provide relief to borrowers in connection with a war, other military operation, or national emergency, including the ongoing moratorium on student loan payments and interest.”

Opponents are expected to argue that loan cancellation of this magnitude requires Congressional approval.