Supreme Court hears arguments in major case that challenges the President’s student debt relief

Millions of borrowers will be impacted by the court’s decision.
Published: Feb. 28, 2023 at 5:18 PM CST
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WASHINGTON (Gray DC) - The Supreme Court heard arguments Tuesday in a major case that challenges the President’s student loan debt forgiveness program. The outcome of the court’s decision will impact the financial future of millions of borrowers who are eligible for the relief.

Borrowers camped out in front of the Supreme Court Monday night into Tuesday morning. They travelled from across the United States to demonstrate in Washington D.C.

“While the government is just bailing out so many of these big corporations when it’s hard times. Can we just do something for the people for once? Can we do something for us?” said Drew Gifford who travelled to the rally from Cincinnati, Ohio.

The Supreme Court case centers on two lawsuits - Biden versus Nebraska and Department of Education versus Brown. Six Republican Attorneys General from Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina sued in the case of Biden v. Nebraska. Two student loan borrowers from Texas sued in the case of Department of Education v. Brown. Both lawsuits seek to shut the program down. The challengers call the program unfair and financially harmful.

“After many failed legislative efforts, the Secretary (of Education) seeks to write off nearly a half trillion dollars in loans for over 40 million borrowers. No statute authorizes this sweeping action,” James Campbell, Solicitor General of Nebraska, told the Supreme Court justices.

The Biden administration told the justices the 2003 HEROES act grants them the authority to issue debt relief in connection to national emergencies such as COVID-19. They argued, the bill was passed by Congress.

“In a circumstance like this one where the Secretary (of Education) has made the findings that without this critical relief for debtors we are going to have a wave of default across the country with all of the negative consequences that has for borrowers. I think it is precisely the type of context where the executive should be able to implement those emergency powers,” said Elizabeth Prelogar Solicitor General Counsel of Record, Department of Justice.

U.S. Supreme Court Chief Justice John Roberts was among the justices who questioned the scope of the relief.

“Most casual observers would say, if you’re going to give up that much amount of money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on. And if they haven’t acted on it, maybe that’s a good lesson to say for the president or the administrative bureaucracy, that maybe that’s not something they should undertake on their own.”

Hear from a Georgetown University Law Expert on the Supreme Court case here

The justices also pressed on the issue of standing. Standing requires the states and borrowers who filed suit to show that they are directly and financially harmed by the plan. Many justices questioned the Attorneys General of states involved in the lawsuit as to why they chose to argue the case on behalf of other organizations. They also questioned the court’s obligation to weigh in on the Congressional act.

“I feel like we really do have to be concerned about jumping into the political fray unless we are prompted to do so by a lawsuit that is brought by someone who has an actual interest. So this is why I’m sort of pressing really hard on the standing point,” said U.S. Supreme Court Justice Ketanji Brown Jackson.

The President’s student loan debt forgiveness program is intended to benefit people making less than $125,000. Eligible Pell Grant recipients could receive up to $20,000 in relief, while other borrowers could receive up to $10,000. In the four weeks the application was open, 26 million people signed up for the relief. That application is now on hold due to a court injunction.

After arguments concluded, Education Secretary Miguel Cardona issued a statement, “today, the Biden-Harris Administration mounted a powerful defense before the U.S. Supreme Court on our plan to provide targeted, one-time student debt relief to more than 40 million working- and middle-class Americans as they recover from the pandemic. The Department of Justice argued against the lawsuits aimed at denying relief to borrowers, made clear that challengers to the program lack standing to even bring their cases to court, and explained the Department of Education’s decades-old authority used by multiple administrations to protect borrowers from the effects of national emergencies.”

The court’s decision is not expected for months.