Supreme Court weighs Biden student loan plan worth billions

WASHINGTON (AP) — The The Supreme Court takes up a partisan legal battle over President Joe Biden’s plan to cancel or reduce student loans held by millions of Americans.

The High Court, with its 6-3 conservative majorityhearing arguments Tuesday in two challenges to the plan, which have so far been blocked by Republican-appointed lower court judges.

Arguments are scheduled to last two hours, but likely will go much further. The public can listen in the court’s website.

Twenty-six million people have applied and 16 million have been approved to have up to $20,000 in federal student loan forgiveness, the Biden administration says. The program is estimated to cost $400 billion over 30 years.

“I am confident that the legal authority to carry that plan is there,” Biden said Monday at an event to mark Black History Month.

The president, who once doubted his own authority to generally cancel student debt, first announced the program in August. Legal challenges soon followed.

Republican-led states and lawmakers in Congress, as well as conservative legal interests, oppose the plan as a clear violation of Biden’s executive authority. Democratic-led states and liberal interest groups are backing the Democratic administration in urging the court to let the plan go into effect.

Without it, loan defaults would increase dramatically when the loan disbursement break ends this summer at the latest, the administration says. Payments were halted in 2020 as part of the response to the coronavirus pandemic.

The administration says a 2003 law, commonly known as the HEROES Act, allows the secretary of education to waive or modify the terms of federal student loans in connection with a national emergency. The law was primarily intended to keep service members from suffering financially while fighting in wars in Afghanistan and Iraq.

Nebraska and other states that sued say the plan isn’t needed to keep default rates roughly where they were before the pandemic. The 20 million borrowers who have their entire loans written off would get a “windfall” that will leave them better off than they were before the pandemic, the states say.

Dozens of borrowers came from across the country to camp near the court on a balmy Monday night, hoping to get a seat for the arguments. Among them was Sinyetta Hill, who said Biden’s plan would erase all but about $500 of the $20,000 or so she has in student loans.

“I was 18 when I applied to college. I didn’t know it would be such a burden. No student should have to deal with this. No one should have to deal with this,” said Hill, 22, who plans to study law , after she graduates from the University of Wisconsin-Milwaukee in May.

Biden’s plan could face a frosty reception in the courtroom. Court conservatives have been skeptical of other Biden initiatives related to the pandemic, including vaccine requirements and reprieve breaks. These were billed mainly as public health measures aimed at slowing the spread of COVID-19.

The loan forgiveness plan, on the other hand, is aimed at countering the economic effects of the pandemic.

The national emergency is expected to end on May 11, but the administration says the economic impact will continue despite historically low unemployment and other signs of economic strength.

In addition to the debate over the authority to forgive student debt, the court will also confront whether the states and two individuals whose challenge is also before the courts have the legal right or standing to sue.

The parties must generally show that they will suffer financial loss and benefit from a court decision in their favor. A federal judge initially found that the states would not be harmed and dismissed their earlier lawsuit an appeals panel said the case could proceed.

Of two people who sued in Texas, one has student loans that are commercially owned and the other is eligible for $10,000 in debt relief, not the $20,000 maximum. They would get nothing if they win their case.

A decision is expected at the end of June.


Associated Press writers Jessica Gresko and Collin Binkley contributed to this report.

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