The Supreme Court is set to hear cases challenging President Joe Biden’s plan for student loan forgiveness, which would cancel up to $20,000 in student debt for federal borrowers. The cases, which will be heard on February 28, were filed by two student loan borrowers who did not qualify for the full relief amount and six Republican-led states, who argue the relief would hurt their states’ tax revenues, along with student-loan company MOHELA. However, legal experts believe the challengers’ arguments are weak, as they rely on a “tenuous, speculative chain of events” to prove the relief is illegal. The outcome of this case will have major implications for the future of student loan forgiveness in the United States.
The Supreme Court Case
The nation’s highest court is just over a month away from hearing cases challenging President Joe Biden’s student-loan forgiveness. Two lawsuits that have slammed the brakes on Biden’s plan to cancel up to $20,000 in student debt for federal borrowers will be taken on by the court on February 28.
One case was filed by two student-loan borrowers who sued because they did not qualify for the full $20,000 amount of relief. The other case was filed by six Republican-led states who argued the relief would hurt their states’ tax revenues, along with that of student-loan company MOHELA, which is based in Missouri where the lawsuit was filed.
Legal Experts Confounded
The latter case has had some legal experts particularly confounded due to the central role MOHELA has taken in the case. While MOHELA has explicitly denied being involved in the state’s decision to sue, the states have continued to write in legal filings that the company would suffer a loss of revenue from loans that it would have serviced prior to any broad debt relief. They also claim that loss would harm the state of Missouri.
The Justice Department’s Arguments
Biden’s Justice Department has denied those claims, saying that MOHELA is a separate entity from the state and can sue and be sued on its own. A series of amicus curiae briefs by over a dozen legal experts, advocates, and scholars recently filed to the Supreme Court supported the Justice Department’s arguments and elaborated on the standing, or lack thereof, the plaintiffs have.
Missouri’s Own Debt
One brief, filed by the UC Berkeley Center for Consumer Law and Economic Justice on behalf of Missouri consumer advocates, highlighted how MOHELA actually owes some debt of its own. This is significant because Missouri cannot claim it would suffer from MOHELA’s failure to pay into a state fund, given that payments have not been made for years and there has not been any apparent harm because of it.
The Supreme Court’s Decision
When the Supreme Court hears arguments for this case next month, it will consider whether the lawsuit has standing. But legal experts believe the six GOP-led states are relying on a “tenuous, speculative chain of events” to prove Biden’s debt relief is illegal, and MOHELA’s failure to pay into the Lewis and Clark fund should only serve to weaken the state’s case.
Law Professors’ Views
Even two law professors who believe Biden’s plan to cancel student debt broadly is illegal aren’t convinced by the state’s lawsuit.
The Future of Student Loan Forgiveness
The outcome of this case will have major implications for the future of student loan forgiveness in the United States. If the challengers are successful, it could mean that millions of borrowers will not receive the relief they were counting on, and it could set a precedent for future challenges to similar policies. However, if the Biden administration prevails, it could be a step towards addressing the student loan crisis and providing much-needed relief for borrowers.