The student loan forgiveness hearing, explained

The Supreme Court heard two cases against the Biden admin’s stalled plan to forgive $400B in student loan debt.

Remember when the Biden admin tackled the $1.6T student debt problem by canceling $400B of it?

The student loan forgiveness hearing, explained

That plan hinged on the Higher Education Relief Opportunities for Students (HEROES) Act.

It allows the secretary of education to change federal student loan terms to stop borrowers from being worse off financially in the event of a national emergency — in this case, the pandemic.

But the joy borrowers felt was short-lived…

… as lawsuits rolled in and stalled relief. On Tuesday, the Supreme Court heard two such cases:

  • Nebraska, Missouri, Arkansas, Iowa, Kansas, and South Carolina allege that the Biden admin overstepped its authority.
  • Two borrowers, upset they didn’t qualify for forgiveness (though one did get a $48k PPP loan mostly forgiven), argue they should have been able to provide comment on the decision before it was made.

The court must now decide if the plaintiffs have “standing,” or the right to sue at all, and if the HEROES Act gives the Biden admin sufficient power to act as it did.

The takeaways

After over three hours of testimony, conservative justices seemed “skeptical” of Biden’s authority, per CNN, but all seemed to question whether plaintiffs face harm and, thus, have standing.

No standing, no case. But, per Forbes, the court could still rule on whether the forgiveness program was implemented legally, and Congress could still pass other programs.

What now?

The justices will vote in the upcoming days, but may not make a decision until June. Regardless, student loan repayment will resume 60 days after litigation is resolved.

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