The US Supreme Court is set to hear arguments regarding a student loan relief program that may potentially eliminate hundreds of billions of dollars in borrower debt. This has sparked debate on whether President Biden has overstepped his bounds.
A coalition of six GOP-led states are trying to block the debt forgiveness plan, calling it an overreach of executive power without clear congressional mandate. They are supported by 17 other states, more than 170 Republican members of Congress, and various conservative advocacy groups.
The student loan relief program could benefit around 40 million Americans, offering up to $20,000 of debt relief to eligible federal Pell Grant borrowers and $10,000 for non-Pell Grant recipients.
The Education Department has already announced a payment pause until mid-2023. Almost $441 billion in outstanding student loans are eligible for forgiveness under the plan, which is expected to wipe out balances for almost 40% of federal student loan borrowers.
The Biden administration argues that the end of emergency declarations does not change the legal justification for extending the student loan plan.
However, the GOP-led states claim that the administration is using the waning health crisis as a pretext power grab to bypass Congress and score political points. Many Republicans believe that the program will only hurt the long-term solution through bipartisan legislative efforts.
The Biden administration told the high court that its debt relief efforts fall within the plain text of the HEROES Act and were a reasonable, targeted solution to confront the risk of default, based on lingering financial hardship caused by an unexpected public health crisis.
The Supreme Court’s decision will have far-reaching implications for both borrowers and lenders. Regardless of the outcome, many people will continue to face the challenge of student loan debt in the future.