What Supreme Court Arguments Mean for the Future of Student Loans

ONE A majority of Supreme Court justices expressed doubts about whether the Biden administration’s student loan forgiveness plan is legal in oral arguments Tuesday.

The members of the court considered two cases, Biden v. Nebraska and Department of Education v. Brownin which the justices asked questions intended to assess whether the lawsuits had legal standing and whether Biden was overstepping executive authority by canceling up to $20,000 in student loan debt for about 40 million borrowers.

The justices asked questions primarily along ideological lines, although Amy Coney Barrett suggested she might support Biden’s agenda, given her skepticism about arguments that the state of Missouri had the ability to advance the case out of part of MOHELA financial loss loan service. . Even if it were reduced, however, that would not be enough to form a majority.

The bottom line, experts say, is that it seems likely that student loan forgiveness will be rejected based on the Supreme Court’s desire to limit executive power.

“Other than Barrett, I haven’t heard any other conservative focus on this in a way that suggests this is an issue we’re struggling with,” says Jed Shugerman, a professor who studies executive branch powers at Fordham Law School.

What did the judges ask for?

The oral arguments began with a question from Justice Clarence Thomas, who echoed a common theme among conservative justices: whether there was a clear provision in the Higher Education Opportunities for Students (HEROES) Act that allowed the Secretary of the Department of Education to offer this program. The HEROES Act is the legal basis for Biden’s student loan forgiveness plan. It allows the Secretary of Education to “waive or modify any statutory or regulatory provision” that applies to student financial aid programs to ensure that those affected by a national emergency “are not financially worse off.” In this case, that emergency is the COVID-19 pandemic.

Chief Justice John Roberts later cited the “great questions doctrine,” which requires agencies to have clear authorization from Congress when deciding matters of major national importance. The language of the HERO Act is particularly broad, which some left-leaning justices, such as Justice Elena Kagan, have interpreted as clear authorization to recommend loan forgiveness.

The conservative justices also questioned whether the student loan relief program was “fair” to borrowers who had already paid off their loans or to the millions of Americans who decided not to pursue higher education. The line of questioning was based on the plaintiffs back Department of Education v. Brown, who are suing because they say they were unfairly relieved of some loan forgiveness. (Myra Brown, one of the plaintiffs, is entitled to no relief, while Alexander Taylor is entitled to only $10,000 instead of the $20,000 given to Pell Grant recipients). They also argue that the program lacked a notice and comment period that would have allowed them to guarantee broader loan relief.

Judge Ketanji Brown Jackson appeared to dismiss the issue of fairness, saying the same reasoning could be applied to any federal benefits program. “I think about the fact that as a result of COVID-19, we’ve had massive inflows of money into various companies (and) organizations, clearly authorized because Congress said to do it,” Jackson said. “I wonder if that would be unfair to people who didn’t have a company or someone who didn’t have a … nonprofit and didn’t get that money. I just don’t know how far we can go with this idea.”

What is at stake?

The decision will affect young Americans like 28-year-old Ramy Ahmed, who is one of 16 million people the Department of Education has approved for loan forgiveness. None of these borrowers have received aid due to the legal challenges. Ahmed currently owes about $30,000 in student loans and could see as much as $20,000 wiped away if Biden’s loan relief plan sticks.

Although Ahmed considers himself lucky to work in a high-paying profession as an accounts executive, he says he is “barely scratching the surface” when it comes to paying off his loans. “I’m at an age right now where I’m trying to build a financial nest egg. And if I just have to pay more out of pocket every month… then that’s going to make all the other financial decisions I make harder,” Ahmed tells TIME.

Experts like Genevieve Bonadies Torres, the deputy director of the educational opportunity program at the Lawyers’ Committee for Civil Rights Under Law, warn that the effects of the Supreme Court’s strike down of Biden’s loan relief plan will be disproportionately felt by people of color.

“The compounding effects of these impairments will mean that groups will not be able to find the right foundation for a thriving economy and have the educational opportunities they need and deserve,” Torres tells TIME. “It will have the effect of exacerbating racial disparities, which are both rooted in a pandemic and also predate the pandemic.”

Cases during this period are normally decided around June and July, but since the judges have decided to fast-track loan forgiveness cases, there is a chance that an opinion will be issued before then.

More must-reads from TIME

Contact us at letters@time.com.

Leave a Reply

Your email address will not be published. Required fields are marked *