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BIDEN SAID THE BENEFIT OF THE SUPREME COURT RULING

December 6, 2022 · 0

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The fate of the Biden administration’s sweeping student loan forgiveness plan
now rests with the Supreme Court.

That may be bad news for borrowers, say legal and higher education experts.

“The court’s conservatives have been very aggressive in striking down the
decisions of Congress and the president,” said Gregory Caldeira, a political
science professor at Ohio State University. “I would not be surprised if the
court invalidated the executive order.”

Higher education expert Mark Kantrowitz agreed.

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Supreme Court likely to rule that Biden student loan plan is illegal, experts
say. Here’s what that means for borrowers

“The U.S. Supreme Court is more likely than not to block the president’s student
loan forgiveness plan,” Kantrowitz said.

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The highest court decided to take the case after the U.S. Department of Justice
filed an emergency application asking the justices to lift the injunction on its
forgiveness plan that had been issued by the U.S. Court of Appeals for the 8th
Circuit, in St. Louis, at the request of six GOP-led states.

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The justices, who will decide whether or not the president’s debt relief policy
causes harm to the plaintiffs or is an overreach of executive authority, said
they would hear oral arguments in February.

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Ruling will settle ‘for now’ student loan challenges
In August, Preisdent Joe Biden announced that the U.S. Department of Education
would deliver student loan forgiveness of up to $20,000 for tens of millions of
Americans. The nonpartisan Congressional Budget Office estimates the plan will
cost around $400 billion.

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Long before the president acted, Republicans had criticized student loan
forgiveness as a handout to well-off college graduates. They also argued the
president didn’t have the power to forgive consumer debt on his own without
authorization from Congress.

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Unsurprisingly, the legal challenges poured in. At least six lawsuits have been
brought against the president’s plan.

The administration closed its portal where borrowers could apply for the relief
last month, although 26 million people had already requested it.

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“The benefit of the Supreme Court ruling is that it will settle, for now, all of
the litigation related to the loan forgiveness,” said Dan Urman, a law professor
at Northeastern University.

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Why the Supreme Court may block forgiveness
For a number of reasons, Urman predicts the Supreme Court will rule against
Biden. He said the conservative justices believe government agencies exert too
much authority and “violate the separation of powers.” In addition, he said, the
concept of loan forgiveness seems to run counter to their notions of individual
responsibility.

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Such a politically fueled decision, however, is likely to further damage the
public’s perception of the Supreme Court, Urman said.

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“Striking down forgiveness will add to growing skepticism that the conservative
justices vote for conservatives, and the liberal justices vote for liberals,”
Urman said. Just 25% of Americans have confidence in the highest court, a Gallup
poll found over the summer.

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If the president’s plan is blocked, he added, it will be “another example, along
with abortion and guns, of the court taking positions that a majority of
Americans oppose.”

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In a poll conducted by The Economist and YouGov in August, 51% of respondents
said they support Biden’s loan relief plan. Around 40% oppose the initiative.

“In the past, the Supreme Court usually ruled in line with public opinion,”
Urman said.

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Arguments over the limit of presidential power
Beyond the popularity of its debt relief plan, the Biden administration insists
that it’s acting within the law, pointing out that the Heroes Act of 2003 grants
the education secretary the authority to waive regulations related to student
loans during national emergencies. The U.S. has been operating under an
emergency declaration since March 2020.

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However, lawyers for the GOP-led states argue that the administration should not
be able to use the public health crisis to issue such a sweeping policy.

“The administration is once again invoking the COVID-19 pandemic to assert power
far beyond anything Congress could have conceived,” the lawyers wrote in a brief
to the justices, pointing out that the highest court previously stopped the
White House’s nationwide ban on evictions.

Yet a group of borrower advocacy groups, in a recent brief to the U.S. Supreme
Court, said student debt forgiveness was essential to the country’s recovery
from the pandemic.

The public health crisis exacerbated the financial difficulties for “borrowers
who have, for decades, been at the mercy of a broken student loan system,” they
wrote.

Without cancellation, they warned, “working and middle-class borrowers are at
substantial risk of default.”

  

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