WASHINGTON — The Supreme Court is poised to issue a much-anticipated ruling Friday that will determine whether President Joe Biden’s long-delayed plan to forgive student loan debt can move forward.
The program, which would allow eligible borrowers to cancel up to $20,000 in debt and is estimated to cost more than $400 billion, has been blocked since the 8th U.S. Circuit Court of Appeals issued a temporary hold in October. About 43 million people are eligible to participate.
The administration has estimated that the program would wipe out all federal student loan debt for about 20 million people.
The Supreme Court will rule on the final day of its nine-month term, a day after the conservative justices voted to end systematic consideration of race in college admissions. The court has one other case to decide, about whether a Christian web designer can refuse to work on same-sex weddings.
The student loan proposal is important politically to Biden, as tackling student loan debt was a key pledge he made on the campaign trail in 2020 to energize younger voters.
But with a conservative-majority Supreme Court suspicious of broad assertions of executive power, Biden’s plan faces a significant hurdle. During oral arguments in February, conservative justices expressed skepticism that the administration could authorize such relief without explicit permission from Congress.
Whatever the court rules, the student loan repayment process is set to begin again at the end of August after having been put on pause during the Covid-19 pandemic, although first payments will not be due until October.
The court is considering two cases: one brought by six states, including Missouri, and the other brought by two people who hold student loan debt, Myra Brown and Alexander Taylor.
The challengers argued that the administration’s proposal — announced by Biden in August and originally scheduled to take effect last fall — violated the Constitution and federal law, partly because it circumvented Congress, which they said has the sole power to create laws related to student loan forgiveness.
In defending the plan, the Biden administration cited a 2003 law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, which says the government can provide relief to recipients of student loans when there is a “national emergency,” allowing it to act to ensure people are not in “a worse position financially” as a result of the emergency.
The challengers said the language in the HEROES Act is not specific enough to authorize a proposal as broad as Biden’s plan.
Biden had proposed canceling student loan debt during the 2020 presidential election campaign.
The administration ultimately proposed forgiving up to $10,000 in debt for borrowers earning less than $125,000 a year (or couples who file taxes jointly and earn less than $250,000 annually). Pell Grant recipients, who are the majority of borrowers, would be eligible for $10,000 more in debt relief.
The administration closed the application process after the plan was blocked. Holders of student loan debt currently do not have to make payments as part of Covid relief measures that will remain in effect until after the Supreme Court issues its ruling.
The nonpartisan Congressional Budget Office estimated in September that Biden’s plan would cost $400 billion.
Source: | This article originally belongs to Nbcnews.com
