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Student-loan borrowers are about to find out if they'll get Biden's debt cancellation

Jun 30, 2023, 18:14 IST
Business Insider
The Supreme Court is set to rule on two cases seeking to block Biden's student-loan forgiveness plan.Chip Somodevilla/Getty Images
  • The Supreme Court will decide on Biden's student-loan forgiveness plan on Friday.
  • The relief has been paused since November due to two conservative-backed lawsuits.
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Friday is the last day of the Supreme Court's term before summer recess — and it means a student-loan forgiveness decision is finally upon us.

Americans will finally learn the outcomes of the three remaining cases, two of which are seeking to block Biden's student-debt relief plan: Biden v. Nebraska and US Department of Education v. Brown.

Biden v. Nebraska was brought on by six Republican-led states that argued the president's plan to cancel up to $20,000 in student debt for federal borrowers will hurt their states' tax revenues, along with the revenue of Missouri-based student-loan company MOHELA. US Department of Education v. Brown was filed on behalf of two student-loan borrowers who sued because they did not qualify for the full $20,000 amount of relief.

Both cases are seeking to permanently block the debt relief from reaching millions of borrowers. It's now up to the Supreme Court to decide if the loan forgiveness is legal, or if it cannot move forward. Regardless of the outcome, the Education Department is still preparing to restart payments in October, with interest beginning to accrue again in September after an over three-year pause.

It's unclear how the court will rule, but as Insider previously reported, two of the high court's prior decisions could offer a glimpse into how justices are handling the student debt cases. Before a court can even determine if a policy is legal, it must confirm the plaintiffs have standing to appear before the court in the first place. To do so, plaintiffs have to show that the policy would injure them, that the injury directly traces back to the defendant, and that the relief they're seeking would address those injuries.

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Rulings on two separate cases this term, Haaland v. Brackeen and United States v. Texas — authored by conservatives Justices Amy Coney Barrett and Brett Kavanaugh, respectively — said the named states in each case did not have standing to sue the federal government because they could not sufficiently show harm suffered from the policies and laws they were challenging. It's an issue justices highly scrutinized during oral arguments for the student-debt relief cases in February.

Of course, past rulings are not a clear indicator of what the court will decide on student-loan forgiveness — and the issue remains highly controversial. Many Republican lawmakers have blasted the plan as costly and unfair to people who already paid off their student loans, and Biden even had to veto a GOP-led bill that passed Congress to overturn the plan.

Some Democratic lawmakers, meanwhile, have vowed to do whatever it takes to ensure student-loan borrowers can get relief — and the White House continues to maintain confidence in the legality of Biden's plan.

"This President, the DOJ, Solicitor General went to the court and fought hard to protect this program," Principal Deputy Press Secretary Olivia Dalton said during a Tuesday press briefing. "Now, we are confident in the legal arguments that we've made. We certainly hope the Supreme Court agrees, because we know all too well what the stakes are for millions of students."

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