Student loan debt forgiveness comes down to Supreme Court ruling

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President Biden’s student loan debt forgiveness plan is in jeopardy.

What you need to know:

• U.S. Supreme Court hearing two challenges to President Biden’s student loan debt forgiveness plan today.
• Biden announced plans in August to cancel $10,000 per borrower and up to $20,000 for pell grant recipients.

• Six conservative states and two college students are arguing Biden’s plan oversteps his authority.
• The student loan debt forgiveness plan would disproportionately impact Black and Hispanic Americans, who are more likely to require student loans to attend higher education.
• If the plan survives a SCOTUS ruling, millions of Americans would have their student loan debt wiped out entirely, according to the Associated Press.

Six months after President Biden first announced he would cancel up to $20,000 in student loan debt per borrower, the Supreme Court is hearing two challenges to the decision. The Court isn’t expected to rule on the case for several months, but the decision will ultimately have a nationwide impact on millions of Americans and the economy.

On Tuesday, oral arguments began in front of the conservative Supreme Court as two lawsuits, one brought by six conservative states and one by two former college students, seek to challenge Biden’s debt cancellation plan from taking effect.

Student loan debt forgiveness hangs in the balance

In August, Biden announced he would cancel $10,000 in student loan debt and another $10,000 for those who used federal pell grants to attend college.

Supporters of the measure note that it would impact roughly 43 million eligible Americans and allow them to contribute more to the economy. The plan would also disproportionately impact Black and Hispanic borrowers, who are more likely to require student loans to attend college.

Over 22 million Americans had already applied for the cancellation within days of applications opening. Yet the Biden Administration was forced to pause the plan once challenges began pouring in.

One challenge to the plan comes from the states of Nebraska, Missouri, Iowa, Kansas, Arkansas and South Carolina. On behalf of the states, Nebraska’s Solicitor General James A. Campbell is arguing the plan would deprive their states of tax revenue and that it amounts to an unlawful erasure of $430 billion in student loan debt, according to CNN.

White House defends plan at Supreme Court hearing

Meanwhile, the White House has defended Biden’s plan. They point to the Higher Education Relief Opportunities for Students Act of 2003—known as the HEROES ACT. Former twice-impeached President Trump used the act to first pause student loan payments at the beginning of the pandemic. Biden has since used it at least five times to extend that pause, and he believes it gives him the authority to cancel a portion of student loan debt altogether.

In the second challenge, J. Michael Connolly, a lawyer who once represented Donald Trump, is arguing on behalf of Myra Brown and Alexander Taylor, two students who say the debt cancellation negatively impacts them. Biden’s team, meanwhile, claims the students don’t have standing to sue.

For many Black student borrowers, cancellation would allow them to create generational wealth without the metaphorical shackle of student loan debt.

Debt forgiveness would be an “opportunity to create a stronger and a more stable foundation for my family and to create generational wealth afterward,” Morgan State University student Desiree Veney told CNN on Tuesday as protesters gathered outside the Supreme Court building.

The Supreme Court isn’t expected to make a ruling on the two cases for several months.