A 'financial disaster for millions of Americans' could arise if the Supreme Court strikes down Biden's student-loan forgiveness, Elizabeth Warren details in a new report

• Sen. Elizabeth Warren asked advocacy groups last month to tell her how student-debt relief would impact their members.
• Their responses, released on Monday, showed severe financial strain if the relief gets struck down.

A day before Supreme Court oral arguments begin on President Joe Biden's student-loan forgiveness program, Massachusetts Sen. Elizabeth Warren released a report on the deleterious effects failing to uphold the president's relief measure would have on millions of borrowers.

Warren has been a vocal lawmaker pushing for student-loan forgiveness, and last month, she asked nearly 20 advocacy groups — including the NAACP and debtor's union the Debt Collective — to tell her how failure to deliver debt relief would impact their members.

Warren's report was shared exclusively with Insider.

The responses emphasized that the relief would help borrowers from low-income and "historically underrepresented communities" the most, and that "denying student debt cancellation would cause financial disaster for millions of Americans."

"If the Supreme Court sides with the extremist judges, millions of Americans' monthly costs will rise significantly when student loan payments resume later this year," the report said.

"Further, nearly every response to Senator Warren's inquiry cited the financial hardship of COVID-19 compounding the existing student loan burden felt by millions of Americans," it added. "Reducing debt burdens through cancellation will help avoid defaults when student loan payments resume and ensure borrowers do not face financial ruin as the economy continues its recovery from the COVID-19 pandemic."

On Tuesday, the Supreme Court will be taking on the two conservative-backed lawsuits that paused the implementation of Biden's plan to cancel up to $20,000 in student debt for federal borrowers making under $125,000 a year. Biden's relief has been on pause since November, and during that time, Democratic lawmakers criticized opponents of the plan, while the GOP urged the Supreme Court to strike down Biden's relief permanently.

Recent data from the Education Department has found that 81% of all applications for debt relief before the online form closed in November came from the bottom 80% of congressional districts based on average income, and the bottom 80% of those districts have more borrowers eligible for relief than the top 20%.

A member of the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) told Warren in the report that if the Supreme Court strikes down the debt relief, it "would mean that the possibility of my future as a homeowner or retire evaporate and I'm going to continue the cycle of working until I die as a renter living paycheck to paycheck. A decision to deny student loan relief means that I remain uncertain if medication could improve my ability to follow my scholarly interests in research."

Still, Republican lawmakers have been adamant that canceling student debt broadly is unfair to those who already paid off their loans or did not borrow for college. GOP lawmakers also contend that the relief would benefit the highest earners. Over half of the House GOP and nearly all Republican senators filed amicus briefs to the Supreme Court opposing the relief, with Chair of the House education committee Virginia Foxx of North Carolina writing in a statement that "Congress is the only body with the authority to enact sweeping and fundamental changes of this nature, and it is ludicrous for President Biden to assume he can simply bypass the will of the American people."

But Warren's report suggests that many Americans want this relief, and financial consequences could be severe without it.

Lawsuits are causing 'financial anxiety for vulnerable borrowers'

Failing to implement debt relief would put a strain on younger and older borrowers alike. A member of the Debt Collective said in the report, "I'm putting all of my hope into this process finally getting approval. I haven't allowed myself to imagine another scenario because I may not continue even trying to exist everyday if that happens. This debt follows me daily."

Another 64-year-old member said that "the thought of having the loan payments starting again in general and without cancellation terrifies me. It means I might have to take a second job or use my 401K retirement money to pay for the loans. I [cannot] plan for retirement."

Biden extended the student-loan payment pause 60 days after June 30, or 60 days after the cases are resolved, whichever happens first, meaning payments could still resume if the Supreme Court strikes down student-debt relief. While the White House has maintained confidence in the legality of its plan and previously said it is not devising a backup plan if its relief gets struck down, many borrowers are struggling to financially plan.

A borrower with $230,000 in student debt previously told Insider that his "fear, regardless of the outcome of the case, is that the White House is so desperate to restart payments and get back to normal that they've forgotten that 'normal' is a decades-long debt sentence; either way, it will be an excuse to say they'd done all the can."

Now, all eyes turn to the Supreme Court, which is expected to hand down rulings in the two cases before the end of its term, typically in late June or early July.