Future of Biden's Student Debt Plan Hangs in the Balance Before Conservative Supreme Court Majority

By Lawrence Hurley - NBC News

WASHINGTON — For months, the Trump Biden administration's ambitious plan to write off billions of dollars of student loan debt has been frozen, blocked by lower courts, and its fate has been left to conservative Supreme Court justices, who will announce their decision in days.

The stakes are high, with 43 million people eligible for debt relief of up to $20,000.

The total cost, if the program goes into effect, has been estimated at more than $400 billion, and the administration estimates that 000 million people would see their full student loans written off.

Activists rally outside the White House in Washington, D.C., on August 25, 2022, to demand student loan debt forgivenessCraig Hudson / The Washington Post via Getty Images file

The proposal is also politically important for Biden, as addressing student loan debt was a key promise of his 2020 presidential campaign to mobilize younger voters.

But with a conservative-majority Supreme Court wary of executive branch strategy, Biden's plan faces a significant hurdle.

"We've fought hard to get here, where the president has promised historic debt relief. We're still hopeful that the Supreme Court will rule on the side of people who have student debt, but we also have clear ideas," said Mike Pierce, executive director of the Student Borrower Protection Center, a group that works to alleviate student loan debt.

The two cases over Biden's debt plan are among 30 that the high court must resolve in its current term, which traditionally ends in the last week of June.

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The court, which has a 6-3 conservative majority, must also rule on other important issues, the most notable of which is another dispute related to affirmative action in college admissions.

Starting June 1, the avalanche of rulings by the justices is expected to put the Supreme Court back in the spotlight of socio-political debate a year after the conservative majority eliminated constitutional protection of abortion rights by eliminating the landmark Roe v. Wade ruling. Wade, and support the carrying of weapons in public spaces.

'It would be transformative'

During oral arguments in student loan cases in February, conservative justices were skeptical about whether the Biden administration had the authority to write off huge amounts of student debt. The court is weighing two cases, one brought by Missouri and five other states, and the other by two people who owe money for their college studies.

The plaintiffs contend that the administration's proposal — announced by Biden in August and initially scheduled to take effect last fall — violates the Constitution and federal law, in part because it circumvents Congress, which they say has the sole power to create laws related to student loan forgiveness.

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The administration has proposed forgiving up to $10,000 of debt to borrowers earning less than $125,000 a year (or couples filing taxes jointly and earning less than $250,000 annually). Pell grant recipients, who make up the majority of borrowers, could be eligible for an additional $10,000 debt reduction.

The relief would have a significant impact, according to Alan Aja, a professor at Brooklyn College in New York who studies racial wealth disparities and signed a brief in support of the government.

People like his students, often members of low-income minority groups, would be more likely to finish school or consider more ambitious job opportunities or could pay off other debt if Biden's plan goes into effect, he said.

"In their minds, it would be transformative," Aja added.

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In its defense of the plan, the Biden Administration cited a 2003 law called the Higher Education Relief Opportunities for Students Act (HEROES Act), which says the government can provide financial relief to student loan recipients when there is a "national emergency," allowing it to act to ensure that people are not in "a worse financial position" as a result of the the emergency.

Challengers say the language of the HEROES Act is not specific enough to authorize a proposal as broad as Biden's plan, an argument conservative justices seem sympathetic to.

It appears that the only possibility for the Government to prevail would be for the Supreme Court to conclude that the plaintiffs lack standing to bring their claims because they cannot show that the program would harm them.

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If the Administration were to win the case, it would not remove all potential impediments to the plan moving forward, as there are other cases pending in lower courts, but if the challengers do not have legal capacity, this would suggest that other individuals and entities bringing cases are unlikely to do so as well.

Ilya Somin, a professor at George Mason University's Antonin Scalia School of Law, said a ruling in favor of Biden on the question of standing "will probably doom" all other cases, though other people or entities that have yet to file lawsuits might fare better.

Other cases on the Supreme Court's agenda

In affirmative action cases, conservative justices indicated that they were inclined to end the consideration of race in college admissions in legal challenges filed by the University of North Carolina and Harvard University.

Such a ruling could lead to a significant decline in admissions of blacks and Hispanics to the nation's most selective colleges and accelerate changes in the criteria used to recruit students.

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Other cases the justices will rule on in the coming weeks include redistricting disputes in Alabama and North Carolina, which could further weaken the Voting Rights Act and limit state courts' oversight of elections, respectively.

The court will also decide a case in which an evangelical conservative Christian website designer wants to avoid punishment under a Colorado anti-discrimination law for refusing to make websites for same-sex weddings.

A theme absent from this year's end-of-term narrative is retirement, with no speculation that any of the justices plan to resign from their lifetime appointments.

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Last week, Chief Justice John Roberts was on the defensive in public statements in which he said the high court, as a separate branch of government, should mind its own business.

But as he entered a period in which judges frantically try to finish writing their sentences, while sometimes having bitter disagreements with each other, Roberts sought to present an institution that functions as usual.

"I'm glad to be able to continue to say that an angry voice has never been raised in our conference room," he said.

At the same event, Liberal Justice Elena Kagan, often on the losing side in the Court's most important cases, made a more nuanced assessment.

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While praising Roberts' qualities as a judge, she was candid about the wide areas of disagreement in an ideologically divided court.

On some of those issues, he said, "I could really pull my hair out for the things he thinks."