U.S. Supreme Court May Ax Case vs Student Loan Scheme

A skeptical conservative majority of Supreme Court Justices heard more than three hours of arguments in two cases challenging President Joe Biden’s plan to forgive an estimated $400 billion in federal student loans, Elizabeth O’Brien and Janet H. Cho reported for Barron’s Daily.

Photo Insert: The US Department of Education expects to start implementing some measures later this year.

Chief Justice John Roberts said most casual observers would see the big outlay of money and “would think that’s something for Congress to act on” but administration lawyers said the Education Department had a clear mandate to alter federal student assistance programs.

Justices also questioned the program’s price tag, and whether it bleeds too far into Congress’s authority to make appropriations. Liberal justices pointed to the pause in loan payments since the COVID-19 pandemic started, which no one has disputed.

Justice Amy Coney Barrett and liberal colleagues questioned whether the six Republican-led states that filed one of the lawsuits had legal standing to bring their case.

Lawyers for the administration also argued Congress knew it was possible the Higher Education Relief Opportunities for Students Act could be used to forgive loans and that Congress could have amended the Act if it wanted to.

The administration has proposed changes to make its repayment plan simpler and more affordable and to help current and future borrowers pay off their student debts faster even if the court rejects its forgiveness plan.

The Education Department expects to start implementing some measures later this year.

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