Biden Student Debt Bailout Goes Before SCOTUS
Student loan borrowers and students gather at the Supreme Court to speak to one another before hearing two cases regarding student loan relief. The court will hear the cases in the evening.
WASHINGTON – The Supreme Court Is it taking up a partisan legal battle over President Joe Biden Plan to eliminate or reduce the student loans of millions of Americans.
The high court with its conservative majority of 3-3 will hear arguments Tuesday in the two challenges to this plan. They have been blocked previously by Republican-appointed judges from lower courts.
Arguments are usually scheduled for two hours. However, it is possible that they will last much longer. The court’s website is accessible to the public..
RELATED: Supreme Court to allow student loan forgiveness
The Biden administration reports that 26 million people have submitted applications and 16 millions have been granted permission to be exempted from federal student loans up to $20,000, with the approval of 16 million. It is expected to cost $400 billion over the next 30 years.
“I’m confident the legal authority to carry that plan is there,” Biden spoke Monday at an event marking Black History Month.
Letters regarding student loan forgiveness in legal battles
Letters have been sent to students confirming that they have been approved, as legal battles continue regarding the Biden administration’s loan forgiveness program. FOX 35 Orlando’s Randi Hildreth tells LiveNOW by FOX’s Josh Breslow how those students will have their wait.
In August, the president announced the program, despite having doubts about his authority to cancel large amounts of student debt. Legal challenges quickly followed.
The plan is being opposed by Republican-led states, lawmakers in Congress, and conservative legal interests. It is a clear violation Biden’s executive power. Democratic-led States and liberal interest groups support the Democratic administration in asking the court to permit the plan’s implementation.
It is important because without it, defaults on loans would be much more severe. The administration claims that the pause in loan payments will end this summer. In response to the coronavirus epidemic, payments were halted in 2020.
According to the administration, a 2003 law known as the HEROES act allows the secretary of education, in conjunction with a national crisis, to waive or modify federal student loans terms. The law was intended to prevent service members being financially worse off during the wars in Afghanistan/Iraq.
Nebraska and other states who sued claim that the plan is unnecessary to maintain default rates roughly at pre-pandemic levels. All 20 million borrowers who had their entire loans canceled would be eligible for a “windfall” They will be better off now than they were before the pandemic.
On a Monday night that was soggy, dozens of borrowers gathered near the court to try and get a seat at the arguments. Sinyetta Hills, one of many borrowers who came from all over the country to camp out near the court on Monday evening in hopes of getting a seat for the arguments, said that Biden’s plan would erase all but 500 student loans she has totalling $20,000
“I was 18 when I signed up for college. I didn’t know it was going to be this big of a burden. No student should have to deal with this. No person should have to deal with this,” Hill, 22 years old, plans to study Law after graduating from University of Wisconsin–Milwaukee in May.
Biden claims that 22 million people have applied for student loan relief
Watch: Biden attacked Republicans in Congress for criticizing student loans relief, even though some of their pandemic relief loans were forgiven.
Biden’s plan might not get a warm reception in the courtroom. Biden’s other initiatives regarding the pandemic were criticized by the court’s conservatives. They included vaccine requirements and pauses in evictions. These were described mainly as public health measures to slow down the spread COVID-19.
The loan forgiveness plan is, however, designed to mitigate the economic consequences of the pandemic.
Although the national emergency is expected end on May 11, the administration claims that economic consequences will continue despite historically low unemployment rates and other signs economic strength.
Along with the debate about the authority of student debt forgiveness, the court will also be examining whether the courts and the two individuals who also face the challenge are legally entitled to sue.
Parties must generally prove that they will suffer financial harm and gain from a court decision in their favor. In the beginning, a federal judge found that the state would not be hurt and dismissed their case before an appellate panel decided the case could proceed.
Two of the people who sued Texas had student loans that were held commercially. The other one is eligible for $10,000 in debt relief. Not the maximum $20,000 limit. If they won their case, they would receive nothing.
It is possible to expect a decision by June end.
RELATED: How to get student loan forgiveness: If you have applied for relief, what should you know?
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This report was contributed by Collin Binkley and Jessica Gresko, both Associated Press journalists.
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