Student loan forgiveness cases reach the Supreme Court: What you should know

The Supreme Court meets Tuesday to hear two cases challenging President Joe Biden’s student loan forgiveness plan, which would wipe out up to $20,000 in debt for millions. In Pennsylvania, more than 700,000 residents stand to benefit if the initiative moves forward. Here’s what you need to know.

In August, Biden unveiled a plan to cancel up to $20,000 in student loan debt for borrowers across the country. The plan is meant to prioritize economically disadvantaged borrowers. Those who earn more money — up to $125,000 — stand to get $10,000 in student debt relief.

» READ MORE: In Pennsylvania, 1.15 million people signed up for Biden’s student loan forgiveness

To date, 16 million people have been approved for loan forgiveness, with 90% earning less than $75,000, according to the White House. In Pennsylvania, nearly 1.2 million residents applied or were automatically eligible for the program, Department of Education records show.

But legal challenges have put things on pause.

The student debt forgiveness plan faces two lawsuits before the Supreme Court.

One, from six GOP-led states — Missouri, Nebraska, Iowa, Arkansas, Kansas, and South Carolina — say the states face financial harm. The other, from two Texas-based plaintiffs, says the two student loan borrowers didn’t qualify for full debt relief forgiveness and were denied the chance to comment on the plan themselves.

In both challenges, the central question is whether the Biden administration is authorized to cancel student loan debt. Biden’s office says the Higher Education Relief Opportunities for Students Act of 2003, known as the HEROES Act, gives the executive branch the ability to remove federal student loan debt if there is an emergency — like the COVID-19 pandemic. But opponents say it’s an overreach that could cause financial harm, with $400 billion in forgiven debts.

The Supreme Court will hear back-to-back oral arguments for the two cases.

Outside the courthouse, advocates for student debt relief are rallying with signs that say things, like, “Student Debt Cancellation is Legal.”

For the first case, some of the key figures speaking include U.S. Solicitor General Elizabeth Prelogar, who is expected to argue that there is legal authority to provide student debt relief because of the COVID-19 pandemic’s economic harm. Nebraska’s Solicitor General James A. Campbell is set to explain why the six suing states believe the relief plan is unlawful.

In the second case, Prelogar is expected to argue that neither the students nor states have the standing to bring a case and that the students will not be harmed by the plan taking effect. J. Michael Connolly, who represents the two suing students, is likely to say that the Heroes Act doesn’t give the president the power to cancel billions in student debt.

Though the Supreme Court is led 6-3 by conservatives, it’s unclear how justices may rule. Either way, the decisions will impact millions of people with outstanding federal student loans.

If the justices decide states do not have the right to sue in the first place, it could cause a chain reaction. Over the years, Republican and Democrat leaders have used state lawsuits as a tactical tool to block presidential policies. The number of such lawsuits has increased, and a Supreme Court ruling could limit them in the future.

If the justices dismiss the cases because the parties have no standing, the program will be allowed to move forward. If the justices strike down the debt relief plan, it’s unclear if other options are being explored.

If the forgiveness program is not able to proceed and litigation isn’t resolved by June 30, student loan payments will resume 60 days after that.

As Tuesday’s arguments played out, the justices appeared to side along ideological lines. Members of the court’s conservative majority expressed skepticism toward the plan’s legality, The New York Times reported.

During the initial arguments on the student loan forgiveness program, Chief Justice John G. Roberts Jr. suggested that Biden’s program overstepped his authority.

Justice Elena Kagan, one of the court’s liberal members, said that the case was clear. She said the White House was authorized to enact student debt relief plan in response to COVID-19.

It’s not clear. Usually, a ruling in a case with such high stakes would be issued in the summer. But, as noted by CNN, because justices expedited the briefing, it could be sooner.