Student Debt Relief Heads to SCOTUS

Feb 21, 2023

The US Supreme Court is scheduled to hear oral arguments next Tuesday on a set of cases relating to the Biden Administration’s plans to cancel some student debts for millions of borrowers. Last August, the Biden Administration announced plans to cancel up to $10,000 in federal student loans for most borrowers and $20,000 for Pell Grant recipients.

In Biden v. Nebraska, Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina sued the administration arguing that it did not have legal authority to cancel the debts. Specifically, the states take aim at the administration’s use of the HEROES Act, a law passed in the aftermath of September 11, that allows the Secretary of Education to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs.”

In Department of Education v. Brown, two student borrowers, Myra Brown and Alexander Taylor, who did not have their loans forgiven sued the Department of Education on similar grounds.

Before deciding on the merits of the cases the Court will need to look at whether or not either set of plaintiffs have standing to sue. Because neither the states nor Brown and Taylor were directly harmed by the decision to cancel debt for millions of borrowers, why should they be able to bring forward a case?!?

The states argue that because lending agencies will lose money because of the cancellation, they’ll be able to contribute less future students and that they stand to lose tax revenue associated with the cancellation. The students argue that because the decision was made by the president, they did not have an opportunity to have their voice heard through a rule making and public comment process.

The Administration is says it’s confident that it will win in court and it doesn’t have plans for what to do if the court overturns the cancellation program. The current pause on debt payments will sunset 60 days after the Court rules or June 30, whichever comes first. (The Supreme Court typically releases its rulings in late May and June).

Borrowers Hit the Streets for Debt Cancellation

A broad coalition of organizations that support the Administration’s decision to cancel the debt including Student Borrower Protection Center, NAACP, Student Debt Crisis Center, and Young Invincibles is mobilizing to put a human face on the impact of debt cancellation. Hundreds of students from around the country are planning on traveling to DC for the hearing.

The action will kick off outside the Court on the eve of the hearing with a Night of Music, Art, and Action, from 6 to 9pm. The show will include a brass ensemble, the Too Much Talent Band; a cappella groups from local universities; a mariachi band; and the indie rock band Home Remedies. Students then plan to camp out over night to get their spot in line for the hearing the next day (seating for oral arguments is allocated on a first-come-first-served basis.