The Supreme Court’s Hidden Clue: What Does It Mean for Student Rights?

Supreme Court Decision on Student Loan Forgiveness Plan Looms

By | June 15, 2023

Introduction

Millions of Americans are eagerly awaiting the Supreme Court’s decision on a pair of legal challenges to President Joe Biden’s student loan forgiveness plan. The plan, if allowed to move forward, could potentially provide up to $20,000 in debt relief to borrowers. While the Court has not yet released its decision, the legal reasoning in a recent opinion may shed some light on how the Court could rule on the loan forgiveness cases.

Legal Questions at Stake

To understand the potential outcome of these legal challenges, it is important to examine two key legal questions that the Supreme Court must consider. The first question is whether the federal law cited by the Biden administration as the basis for the forgiveness plan actually authorizes such broad debt relief. The second question is whether the challengers to the plan have the legal standing to sue.

HEROES Act of 2003 and Student Loan Forgiveness

The Biden administration has argued that the program is authorized under the HEROES Act of 2003, which grants the Education Department the authority to modify or waive student aid provisions in response to a national emergency. This includes provisions related to loan forgiveness. During the oral arguments in February, a majority of the Justices expressed skepticism about the administration’s interpretation of the law.

Challengers’ Standing to Sue

One crucial factor that the Supreme Court must consider is whether the challengers have standing to sue. To establish standing, the challengers must demonstrate that they would be directly and concretely harmed by the loan forgiveness plan. The case brought by a coalition of Republican-led states, led by Nebraska, argues that the plan would cause a state-affiliated loan servicing agency to lose money, thereby harming the states. However, the Biden administration has argued that the agency is financially independent from the state and has the authority to sue in its own name. During the oral arguments, Justice Amy Coney Barrett expressed concerns about the challengers’ standing, suggesting that if the agency would be harmed, it should have filed the lawsuit or been included in it.

Implications of Recent Supreme Court Decision

In a recent 7-2 opinion in Haaland v. Brackeen, Justice Barrett, writing for the majority, rejected arguments made by the State of Texas regarding standing to sue the federal government. This decision emphasized that to establish standing, a plaintiff must show a concrete injury that can be traced to the defendant’s unlawful conduct and that the requested relief would redress that injury. Barrett also rejected arguments for third-party standing, which is the ability of a party to assert standing on behalf of someone else.

Although the Haaland case is unrelated to the challenges to student loan forgiveness, the Supreme Court’s decision on standing and third-party standing could have implications for the loan forgiveness cases. The Court’s reaffirmation of long-established precedent regarding a state’s ability to sue the federal government is significant. Furthermore, Barrett’s rejection of third-party standing aligns with the arguments made by the Biden administration regarding the challengers’ standing based on an injury incurred by MOHELA, the state-affiliated loan servicing agency.

When Will the Supreme Court Rule?

The Supreme Court could issue its ruling on President Biden’s student loan forgiveness plan as soon as Friday, June 16, which is the next opinion release day. However, given that the Court has several other decisions to release, the ruling could also be announced on Thursday, June 22, or any date between then and early July.

Regardless of the Court’s ruling, it is important to consider alternative options for student loan forgiveness. If the Supreme Court rejects Biden’s plan, borrowers should explore other possibilities for debt relief, such as legislative reform or alternative forgiveness programs.

Conclusion

The impending Supreme Court ruling on student loan forgiveness has significant implications for millions of borrowers. While the legal arguments and precedents are complex, the Court’s recent decision on standing provides some insight into its potential ruling. Ultimately, regardless of the outcome, it is crucial for borrowers to stay informed about the ever-evolving landscape of student loan forgiveness and explore all available options for debt relief.

is the Current Affairs Commentator for The New York Times, offering insights on key issues relating to personal finance, politics, and the economy.