Supreme Court may reject 26 million student loan forgiveness applications

(CNN) Conservative Supreme Court justices took a predictably dim view of President Joe Biden’s controversy on Tuesday. Scheduled to forgive up to $20,000 in federal student loans Few borrowers and nearly half a trillion in debt wiped out.

Biden announced the plan ahead of the midterm elections last August. He faced mounting pressure from Democratic lawmakers, who called on the president to take executive action, and it became clear that Congress could not muscle through a protracted proposal.

Whether the debt relief helped Democrats overperform in that election is debatable, but the program’s one-sided politics was a major sticking point for Supreme Court justices who doubted Biden’s power to do things without congressional approval.

Related: Extracts from Arguments

One takeaway from Tuesday’s hearing surprised me: Judge Amy Coney Barrett sounded like a potential swing vote.

Oral arguments challenged the program in two cases: one brought by a Republican-led group of states, and the other by two individuals who did not qualify for the amnesty program’s full benefits. Many conservative justices were concerned with fairness, administrative oversight, and the dynamics of whether states could bring their case.

Why should this forgiveness be given to borrowers instead of those who worked to pay off their debt or dropped out of college because they couldn’t afford it?

Those are valid questions, and the idea of ​​debt forgiveness divides the country in half. In National voting Conducted for the 2022 midterm elections, 50% of midterm voters, mostly Democrats, approved of Biden’s debt relief plan, and 47%, mostly Republicans, opposed it.

It doesn’t solve the bigger problem

In Tuesday’s arguments, Justice Sonia Sotomayor was curious about possible debt forgiveness for millions of people can affect Many of them don’t have the same support lines that others had during the pandemic.

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“They don’t have friends or family or anyone else who can help them make these payments,” he said. Those borrowers will be affected by the pandemic in ways that others may not be, he said.

A multi-generational problem

The most instructive story I read today on the fundamental issue came from CNN’s Elise Hammond. Student loan problem.

More than $1.6 trillion is owed, he writes, a combined figure that has risen with spending on higher education.

Since graduates generally earn more money than non-graduates, taking out a loan is an investment. But debt can haunt people for decades. Nearly a quarter of debt is held by people 50 and older.

Loan forgiveness is one way to address racial inequality for black graduates, in particular. tend to graduate with heavy debt loadsIt makes it difficult for them to use the degree.

Biden’s proposal would be a big step forward, but less comprehensive than the plan approved by Congress, and it would take only a little from the larger balance sheet and do nothing to address the root problem, which is college costs.

Loan details

Recognized up to Biden $10,000 in federal loan forgiveness for the most qualified Borrowers and borrowers up to a total of $20,000 a Bell Grant The program focuses on people who are trying to enter the middle class — that is, from low-income backgrounds — while attending college.

Interest in forgiveness is significant:

  • more than 40 million borrowers are eligible.
  • So far 26 lakh people have applied.
  • 16 million already Approved.

They come from every part of the country, a point the White House was trying to make when it released a list Candidates from congressional district.

Shouldn’t it go to Congress? Probably not

Chief Justice John Roberts pointed out during arguments that something that affects so many people and costs so much money, to the lay observer, has to come from Congress.

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“If they don’t act on it, it’s probably a good lesson for the president or the administration bureaucracy, and it’s not something they should undertake on their own,” Roberts said.

Management points out 9/11-Era Act They say they allow the education secretary To gain great power during a national emergency, in this case a pandemic. But judges have recently become skeptical of urgent arguments related to Covid.

Plan for August

Whatever happens in court, A Pandemic-related pause in federal student loan payments It is valid for almost three years for all borrowers and will expire at some point. It’s time to start budgeting to get them back Long deferred debt repayment.

Department of Education regardless of the judgment of the court Payment Warning 60 days after the latest suspension The deadline is June 30, when the Supreme Court is expected to make its decision. That means the loan will have to be repaid in late August.

Every credit story is unique

CNN’s Aileen Graef filed this for CNN, speaking to student loan borrowers gathered outside the courthouse on Tuesday. Live story On arguments:

Destiny BerryThe first-generation college student at Morgan State University in Baltimore lives in a single-parent family of five.

“Right now, I’ve got a lot of debt. … I’m just trying to get through college without stressing about all the payments and everything,” Perry said.

Perry said she’s looking into scholarship opportunities to offset the debt, but she knows that won’t be enough for a debt-free graduate.

Glenn Lopez, a freshman at Morgan State, described her student loan debt as a “creepy feeling.” He said he thinks about debt “every two or three days.”

Representative Ayanna Pressley He told CNN that he knows about student loans from a personal perspective.

“Well, what I’ve shared is certainly a story with no fluff. This is a systemic crisis — a nearly $2 trillion dollar crisis that will burn people from every walk of life,” the Massachusetts Democrat said.

“Like millions of black borrowers — I grew up in a single-parent family — and because of the financial crisis, I had no choice but to take out those loans. I didn’t pay those loans back. , but it took me over 20 years to do so. And I was unemployed, “I checked life so often that I couldn’t make ends meet. I couldn’t move forward,” he said.

Responding to opponents’ arguments that people should pay their debts, Pressley said, “Poverty is not a character flaw.”

“People are treading water, considering the rising costs. They are treading water, and we can do something to ease this burden and this hardship,” he said.

A harbinger of a new era

There is a separate and more important question about the six Republican states and the two borrowers Bringing lawsuits requires “standing” — that is, the legal right to bring disputes in the first place. In fact, residents of those states will benefit from the amnesty.

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CNN legal analyst Steve Vladek told CNN’s Kate Bolduan, a law professor at the University of Texas at Austin, that if the Supreme Court gives permission to the six red states, it has the potential to open a new era of legal challenges. Inundate the legal system with challenges to any and all presidential actions.

“Will their hostility to the program actually lead to a weakening of the historic limits of standing?” According to Vladek, an issue for judges to grapple with, they argue, is a political issue that should be decided at the ballot box.

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