Supreme Court Defends Billions in Biden’s Student Loan Plan

WASHINGTON (AP) — The Supreme Court Arguments have begun in a partisan legal battle over President Joe Biden’s plan to eliminate or reduce student loans. Held by millions of Americans.

The high court, with its 6-3 conservative majorityI heard the arguments The plan, in two challenges on Tuesday, has so far been blocked by Republican-appointed judges in lower courts.

The arguments were scheduled to last two hours, but could go on longer. The public can listen to it AP YouTube Channel or on Website of the Court.

Early in the arguments, several conservative justices grilled the Biden administration’s top Supreme Court lawyer, Elizabeth Preloger, and suggested the administration had overstepped its authority on the plan.

Chief Justice John Roberts pointed to the widespread impact and cost of the plan, estimated to cost $400 billion over 30 years.

“If you’re talking about this in a nutshell, I think most casual observers would say you’re going to give up so much … money. If you’re going to affect the obligations of so many Americans on something that’s so controversial, they’re going to think that’s something for Congress to act on,” Roberts said.

The Biden administration says 26 million people have applied for up to $20,000 in federal student loan forgiveness under the program.

“I believe we have the legal authority to carry out that plan,” Biden said Monday at an event marking Black History Month.

The president, who once doubted his own authority to broadly cancel student loans, first announced the plan in August. Legal challenges quickly followed.

Lawmakers in Republican-led states and Congress and conservative legislative interests have lined up against the plan as a clear violation of Biden’s executive authority. Democratic-led states and liberal interest groups support the Democratic administration.

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Without it, the administration says loan defaults could increase dramatically when the moratorium on loan payments ends later this summer. Payments were suspended in 2020 as part of the response to the coronavirus pandemic.

The 2003 law, commonly known as the HEROES Act, allows the education secretary to waive or modify the terms of federal student loans in connection with a national emergency, the administration says. The law was primarily intended to ensure that service members would not be financially disadvantaged while fighting wars in Afghanistan and Iraq.

Nebraska and other states that have sued say there is no need to keep the default rate roughly where it was before the pandemic. States say 20 million borrowers will have their entire debts wiped out, leaving them better off than before the pandemic.

Dozens of borrowers from across the country camped out near the courthouse on a wet Monday evening, hoping to find space for arguments. Among them was Cinyetta Hill, who said Biden’s plan would wipe out all but $20,000, or $500, of his student loans.

“I was 18 when I joined college. I didn’t know it would be such a big burden. No student should have to face this. No person should have to face this,” said Hill, 22, who plans to study law after graduating from the University of Wisconsin-Milwaukee in May.

Biden’s plan may meet with a frosty reception in the courtroom. Conservatives on the court are skeptical of other Biden initiatives related to the pandemic, including vaccination requirements and pauses in evacuations. They were largely billed as public health measures aimed at slowing the spread of COVID-19.

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The loan forgiveness program, by contrast, aims to counter the economic effects of the pandemic.

The national emergency is expected to end on May 11, but the administration says the economic effects will linger, despite historically low unemployment and other signs of economic strength.

In addition to the debate over the power to forgive student loans, the court will face challenges before the justices to whether states and two individuals have legal standing or can sue.

Parties must generally show that they would be financially harmed and benefited by a court decision in their favor. A federal judge initially found the states harmless and dismissed their case before saying the appeals panel could proceed..

Of the two individuals suing in Texas, one consists of commercially held student loans, and the other is eligible for $10,000 in debt relief, not the $20,000 maximum. If they win the case they get nothing.

A decision is expected by the end of June.

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Associated Press writers Jessica Cresco and Colleen Binkley contributed to this report.

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