Biden’s Student Debt Bailout Hinges on Two Cases That Start This Month

This month is crucial for President Joe Biden’s student loan forgiveness plan. Oral arguments will start at the 28th U.S. Supreme Court – Two cases related to cancellationThis could save millions of Americans from getting rid of thousands of dollars of debt.

The Supreme Court Hearing two cases relating to forgiveness. The first, Nebraska v. BidenSix conservative state attorneys of general filed a lawsuit against the Biden administration claiming it was exceeding its authority. A conservative advocacy group filed the second for two individuals. One who is not eligible for the forgiveness plan and one who is not eligible for $20,000 in forgiveness.

The Biden administration says they have authority to implement the programs under the HEROES Act of 2003, which allows the Secretary of Education—currently, Miguel Cardona—to institute changes to the student loan program in times of National emergency (in this example, the COVID-19 Pandemic). It allows him to “waive or modify” Provisions relating to student financial assistance programs such as repayment terms

According to the White House, cancelling debt will guarantee that borrowers don’t end up in bankruptcy Post-pandemic, financial hardships are worse when federal student loans payments are madeThese are the resulting For almost three years, the pause was maintained, resume.

“Ending that pause without providing some additional relief for lower-income borrowers would cause delinquency and default rates to spike above pre-pandemic levels,” The In a brief filed last week, the U.S. Department of Justice stated that it was aware of the matter.. Two dozen legal scholars Amicus Brief filed with the Supreme Court Last month, I supported the legal standing of the Biden administration.

Vaishali Rao (partner at Hinshaw & Culbertson) says that the court will decide whether the COVID-19 crisis is a valid reason for widespread relief. Rao represents lenders, servicers, and debt collectors. He has also examined student loan origination and servicing practices.

“The HEROES Act language is pretty clear that the government has the authority” Rao suggests that the debt be cancelled. “Does it make sense for the circumstances, or is there something narrower that could be done?”

Rao says many borrowers were already in financial difficulty before the pandemic and this problem will only worsen. This forgiveness could serve as a precedent to guide future government action.

Biden’s plan, announced last year, would allow borrowers to forgive $10,000 in federal debt if they earn less than $125,000 per year. Pell Grant recipients who receive Pell Grants during school will be able to forgive as much as $20,000 in federal debt. The one-time forgiveness was open to 26 million applicants when it opened.

What should borrowers do?

All student loan borrowers are allowed to wait for the decision. With a conservative majority Supreme Court of 6-3, It’s better to be practical. If you are able to make the payments, interest will not be charged. Interest accrual will resume once payments are made.

“It’s better to be conservative and think this might lose, and then have money to make the payments,” Rao. “And then if the government does win, it’s an added bonus. I worry about people not having a financial plan because they’re counting on forgiveness.”

If you’re struggling and won’t be able to make payments when the federal pause ends, it never hurts to contact your student loan servicer—the company that bills you each month—and see if they can help you work out a repayment plan.

Rao also offers advice to borrowers “get to know” Your debt. Are you in default on federal loans? Forgiveness is only available for federal loans.

Also, don’t forget to take advantage Public Service Loans Exemption, Repayment Protection for BorrowersIf you are able, other targeted relief programs. These programs are independent of Biden’s plan for one-time relief and will remain in effect even if Biden is disqualified by the Supreme Court.

Oral arguments are scheduled for February 28, 2023. More than 26 million Americans applied to the student debt relief program.According to the Biden administration, it is.

This story originally appeared on Fortune.com

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