As we inch closer to a Supreme Court decision on the issue, the education secretary confirms that student loan repayments will resume this year.
05/19/2023 1:30 P.M.
3 minute read
The U.S. Supreme Court is set to rule soon on two cases that aim to halt the Biden administration’s plan to forgive up to $20,000 in federal student loans for borrowers, according to an article in The Hill.
The Supreme Court justices are expected to issue a final ruling by the end of June.
Earlier this week, Education Secretary Miguel Cardona confirmed that the pause on federal student loan payments is still set to end this year.
“The emergency period is over and we’re preparing our borrowers to restart,” Cardona said at a Senate Committee on Appropriations hearing.
He “reiterated that the Biden administration plans to restart student loan payments no later than 60 days after June 30, despite some speculation that the pause would be extended for a 10th time,” The Hill reported.
“We recognize that our borrowers need information and they need a long on-ramp because it has been three years of resuming payments. We’re confident, [s]enator, that the Supreme Court will rule in favor of the targeted debt relief, providing relief for millions of borrowers, and we want to make sure that the information that borrowers get is accurate,” Cardona said at the May 17 hearing.
Here’s the breakdown of the two cases under Supreme Court review:
Biden v. Nebraska
A group of six Republican-led states challenged the student loan forgiveness plan, claiming the loss of tax income and other revenues from state organizations’ business dealings with some loan servicers would cause their economies to suffer, ACA International previously reported.
Supreme Court oral arguments in the case from the 8th Circuit Court of Appeals were held in February.
The 8th Circuit issued a temporary injunction in November to halt the program until the legality of the debt relief is decided.
Department of Education v. Brown
In this case brought by two individuals, backed by the Jobs Creators Network Foundation, a Texas district judge ruled in the complaint that Biden lacked the authority to establish the student debt relief program.
In November, the 5th Circuit Court of Appeals maintained the district court’s decision, and Supreme Court oral arguments in this case were also held in February.
The arguments focused on Cardona’s authority to create a loan cancellation program under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 and whether a group of Republican state attorneys general and two student loan borrowers had standing to file suit against the federal program, ACA previously reported.
In an analysis put out by Temple University, Mark Rahdert, professor of constitutional law at Beasley School of Law, weighed in on the potential outcomes of the Supreme Court’s decision:
“In the event that both cases get dismissed, Rahdert says it is still possible that new lawsuits could pop up in the future. He has an eye on student loan servicers—agencies responsible for processing student loan payments—in particular because they may have legal grounds to file a lawsuit against the Biden administration.
‘Student loan servicers would certainly have grounds to bring forward a lawsuit against the Biden administration because they can argue that their business interests are being impacted by the student loan forgiveness plan,’ Rahdert said.”