The Supreme Court May Quash Biden's Student Loan Forgiveness: Here's What Borrowers Should Do
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The Supreme Court heard challenges to President Joe Biden’s student debt relief plan. The proposal, which would cancel between $10,000 and $20,000 in current debt for most borrowers, has been on hold since conservative opponents filed a series of lawsuits last fall. Although lower courts have heard and ruled on the issue, the Supreme Court will have the last word on whether Biden’s plan moves forward.
Given the tenor of oral arguments, the answer is most likely disappointment for the White House. During questioning the six conservative justices indicated that they strongly disagree with the politics of student loan forgiveness, historically a dispositive signal of how this bloc will vote. In doing so, they framed the issue as a “major question,” a recently created and ill-defined doctrine that this Court has used in the past to overturn laws with little further justification.
For millions of borrowers, this will mean the difference between significant relief and ongoing payments. If you’re among them, the question is… what next?
Those who want extra hands-on guidance on how this decision could affect their finances may want to match with a vetted financial advisor for free.
What Is the program?
When Biden ran for president, one of his major campaign promises was general debt relief for student borrowers. This has been a signature issue for young Americans, with collective student debt topping $1.75 trillion at an average 5.8% interest rate.
To help address this issue, in August, 2022 the Biden administration announced a forgiveness program. If allowed to go forward, the plan will forgive up to $10,000 in student debt for all borrowers earning less than $125,000 ($250,000 for married households). Any borrowers who received low-income Pell grants would be eligible for another $10,000, for a combined $20,000 in loan forgiveness.