There are no challenges to the Biden plan on student debt
Biden’s Debt Forgiveness Plan for a Pandemic-Related Student Loan Payment Pause Is Not the Same As Direct Loans
While Biden’s loan forgiveness plan would benefit many people with student loan debt – myself included – it’s the borrowers who never graduated or who went to predatory institutions that are currently being hurt the worst, and would see the greatest benefit by having a chunk of their debt knocked off.
No matter what happens at the court, a pandemic-related pause on federal student loan payments that has been in place for nearly three years for all borrowers will be ending at some point. budgeting for the return of those long-deferred loan payments is necessary.
“Borrowers with privately held federal student loans who applied to consolidate their loans into Direct Loans before September 29, 2022 will obtain one-time debt relief. Only a small percentage of borrowers have loans from the FFEL program. This is a completely different program than Direct Loans,” the statement said.
Judge Autrey, who was appointed by President George W. Bush, did not rule on the larger issue in the lawsuit, which was brought by Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. Instead, he said the states had not suffered injuries of the sort that gave them standing to sue.
There have been legal challenges to Biden’s debt relief program since it was announced.
“Republican officials from these six states are standing with special interests, and fighting to stop relief for borrowers buried under mountains of debt,”said White House spokesman Abdullah Hasan in an emailed statement.
The President and his administration are giving working and middle class families the space to recover from the P/E and resume loan payments in January.
The Biden Administration’s Impact on Student Loan Cancellation in the Era of the 2001 September 11, 2001, Terrorist Attacks
The Biden administration’s announcement came hours after a borrower sued, arguing that he would be forced to pay state taxes on the amount canceled – an expense he would otherwise avoid.
If you got a federal grant for college while also having a debt, you are entitled to up to $20,000 of debt forgiveness. Low-income students receive grants based on family size and income and the cost of college, as well as other factors. The borrowers are more likely to struggle to repay their student debt.
The Biden administration argues that the CBO’s cost estimate should be viewed over a 30-year time period and came out with its own analysis two days later. The program will cost an average of $30 billion per annum over the next decade and $379 billion over the course of the program.
The nonpartisan Congressional Budget Office said in a report released last week that the student loan cancellation could come at a price of $400 billion but noted that those estimates are still “highly uncertain.”
In court papers, Solicitor General Elizabeth Prelogar stated that the Higher Education Relief Opportunities for Students Act of 2003 gives the government the authority to offer relief. Under the law, passed to help active-duty military in the wake of the September 11, 2001, terrorist attacks, the government says the secretary of education has the authority to act in a national emergency to make sure borrowers are not left worse off with respect to their loans than they were before the emergency.
A conservative advocacy group called the Job Creators Network is also weighing its legal options, planning to file a lawsuit once the Department of Education formalizes the student loan forgiveness plan next month.
The Biden administration’s legal authority is strong, according to a staff attorney at the National Consumer Law Center, but who would have legal standing to bring a case is unclear. Standing to bring a case is a procedural threshold requiring that an injury be inflicted on a plaintiff to justify a lawsuit.
If the standing hurdle is cleared, the case would be heard by a district court which could or could not issue a preliminary injunction to prevent the cancellation from happening before a final ruling is issued.
How the Biden Administration is Fighting Scam Artists: Why Student Loans Are Forgiving is Christmas, Thanksgiving & Fourth of July for Scammers
Broadly, the organization argues that the U.S. Department of Education is acting outside of its administrative authority by forgiving student loans. The Department of Education can manage the various loan programs, but can’t give out loans “unilaterally.” This power, they say, rests with Congress.
Senior administration officials said Wednesday that the Biden administration is increasing its efforts to fight scam artists who take advantage of borrowers applying for student loan forgiveness.
About nine million people got an email from the Department of Education that said the application for student loan forgiveness had been approved.
“This Biden forgiveness thing is Christmas, Thanksgiving and the Fourth of July all rolled into one for the scammers,” says Betsy Mayotte, the president of the Institute of Student Loan Advisors, a nonprofit that offers free counseling to borrowers.
Mayotte said the release was a great step. There are only two things that we can do as a community to prevent fraud. One is to educate borrowers and the other is enforcement.”
The administration’s efforts to stop these kinds of scams fall on the shoulders of borrowers themselves, which is why many of the plans announced focus on increasing efforts to educate the public.
“It’s an all-government approach, because what we know is it’s already happening, that there are evil people who will be trying to use a program like this, that’s trying to help people, and run their own frauds and scams to somehow get money or personal information about people,” says Richard Cordray, the chief operating officer of Federal Student Aid, a branch of the Education Department.
“We’re trying to give relief to the hard working former students who deserve it, so we’re trying to do that here,” Cordray said. “We’re moving at warp speed to get the application and the process going here.”
A Catch-22: A simple and secure site for borrowers to apply for debt relief from a trusted source — A briefing on debt forgiveness applications
The administration urged borrowers to sign up to be notified when the application is available, to make sure their loan servicers have their current contact information and to report any scams they encounter to the FTC.
One way of avoiding scam vulnerability in the beginning would be to give more specific information on what the forgiveness application will look like or when to expect it.
The administration wrote in a fact sheet that developing a simple and secure site for borrowers to apply for debt relief and have the most current information from trusted sources is one of the most critical ways to prevent scam and protect borrowers.
There were no more details about when the application will go live or what the procedure will look like in the briefings on Wednesday.
“It’ll help in one way,” she says. If I know the people who sell fraudulent applications, they’ll use that as an opportunity. You have to act fast. Time is short. Since the applications are out, we can help you to make sure you don’t miss it. So it’s a catch-22.”
Online Applications for Federal PLUS Loans: A Response to a Republican-Leading Attorney General Concerning Student Financial Responsibility Under Biden’s Plan
In addition to federal Direct Loans used to pay for an undergraduate degree, federal PLUS loans borrowed by graduate students and parents may also be eligible if the borrower meets the income requirements.
The online application will be short, according to the Department of Education. The applications won’t need to be uploaded by borrowers, as long as they have the Federal Student Aid ID.
We will review the application and work with the loan servicer to process your relief. We’ll contact you if we need any additional information from you,” the department said an email to borrowers last week.
There are a handful of states that may tax the debt discharged under Biden’s plan if state legislative or administrative changes are not made beforehand, according to the Tax Foundation.
Republican states are leading the charge. In addition to the lawsuit filed by six Republican-led states that say they could be hurt financially by the forgiveness plan, Arizona Attorney General Mark Brnovich also filed a lawsuit last week.
Brnovich, a Republican, argues that the policy could reduce Arizona’s tax revenue because the state code doesn’t consider the loan forgiveness as taxable income, according to the lawsuit. The complaint also argues that the forgiveness policy will hurt the attorney general office’s ability to recruit employees. The Public Service Loan Forgiveness program is currently only available to its employees, but some potential job candidates may not consider that a benefit if their student debt is already canceled, the lawsuit argues.
“Make sure you work only with the US Department of Education and our loan servicers, and never reveal your personal information or account password to anyone,” it said in an email to borrowers.
The program provides debt relief to individuals and households with an annual income limit of $125,000 per individual or $250,000 per household.
The application website for testing was opened by the education department quietly on Friday night. He said that over eight million people had applied by Monday. The English and Spanish versions of the form can be used on computers and mobile devices.
Justice Amy Coney Barrett refused to take up an appeal of a challenge to the student loan forgiveness program.
The Brown County Taxpayers Association did not have standing to bring the challenge because the courts ruled that they did not have the legal right to do so. Under normal circumstances, taxpayers don’t have a general right to sue the government over how it uses taxpayer funds.
Barrett acted alone because she has jurisdiction over the lower court that ruled on the case. She declined to refer the matter to the full court. Her denial was the only sentence on the docket.
A federal district court judge turned down a lawsuit from six Republican-led states because they didn’t have the legal standing to bring it.
The states are expected to contest the decision. That would send the case to the 8th Circuit Court of Appeals, where it is likely to face a panel of conservative judges.
The Biden administration is also facing lawsuits from Arizona Attorney General Mark Brnovich, and conservative groups such as the Job Creators Network Foundation and the Cato Institute.
The first day of Obamacare’s website launch: An application and response from the federal district court in Texar-Alabama
The person who got the application was Justice Amy ConeyBarrett from the Seventh Circuit Court of Appeals. Her decision was probably agreed to by the court’s other justices.
A federal district court in Missouri tossed out a closely watched challenge to the program, which was brought by six GOP-led states.
The emergency request to the Supreme Court was brought by the Brown County Taxpayers Association, a Wisconsin organization made up of around 100 taxpaying individuals and business owners that advocates for conservative economic policy.
The plan has been challenged by several other conservative organizations. In different courts, the lawsuits may face the same difficulty showing a specific harm to stay alive.
A week ago, the Biden administration unveiled its application for student loan forgiveness. Twitter lit up with joyful posts about debt relief, as well as about the surprisingly easy process.
Twenty-two million people submitted applications during the first week the website was open, eight million of them over the first weekend, a startling contrast to the six people (not six million, nor 6,000 — just six) who successfully negotiated the Obamacare website on the day of its launch in 2013. As professors of public policy, we have shared our research on how administrative burdens make vital public services harder to access with the Biden administration, and we spoke with Department of Education officials about how many people might participate in the program (though we played no role in helping design this process or the application itself). Even so, it was astonishing for us to see just how simple it is to apply for debt relief.
Setting aside the conflict over policy, the streamlined application shows what is possible when government prioritizes the public in the delivery of public services. The form can be completed within a few minutes. It works on both a computer and a phone, and is available in both Spanish and English. It’s three simple pages: a welcome page, a form and a confirmation page on which applicants attest that they are eligible. A small step such as not having to create an account with a password can actually discourage people from starting. Applicants need five pieces of information, ranging from name to date of birth and phone number. That’s it.
A Supreme Court Order Distinguishing Between Biden’s and Secretary of Education’s Students’ Loan Relief Under the Covid-19 Pandemic
The payment pause will now last until 60 days after litigation over Biden’s student loan forgiveness program is resolved. If the litigation is not solved by June 30, payments will not be made for 60 days.
The White House expects Tuesday’s extension to alleviate confusion for borrowers as the administration asks the Supreme Court to overturn lower court orders blocking Biden’s student debt relief program.
“I want borrowers to know that the Biden-Harris administration has their backs and we’re as committed as ever to fighting to deliver essential student debt relief to tens of millions of Americans,” Cardona said.
The Supreme Court was asked by the Biden administration to allow the student loan program to go into effect pending appeal as other challenges to the program continued.
The challenge has been brought by two individual borrowers – Myra Brown and Alexander Taylor – who are not qualified for full debt relief forgiveness and who say they were denied an opportunity to comment on the Education Secretary’s decision to provide targeted student loan debt relief to some.
The justices have already announced they will hear arguments in a different case this term, in a dispute brought by a group of states. The court didn’t say whether the cases would be consolidated.
The court asked if the challengers had the legal right to bring the case. The court also asked the parties to discuss whether Biden’s plan was “statutorily authorized” and was adopted in a “procedurally proper manner.”
The program is already frozen as legal challenges play out and Monday’s action doesn’t change that. It does, however, add new plaintiffs to the mix.
In the case at hand, the justices had been urged to hear oral arguments and lift the block on the program. They only agreed to the request of the last one.
“This is the second of two cases in which lower courts have entered nationwide orders blocking the Secretary of Education’s plan to use his statutory authority to provide dept relief to student-loan borrowers affected by the Covid-19 pandemic,” Prelogar argued in court papers.
The most recent estimate from the White House said some 16 million borrowers had been approved for the relief program. It’s not clear how many received Tuesday’s reversal email.
The Department of Education said in a statement that “communicating clearly and accurately with borrowers is a top priority” and that it is in close touch with the outside vendor, Accenture Federal Services.
The Department of Education will review more student loan forgiveness applications if and when the government’s case prevails in court, according to the most recent, accurate emails sent to borrowers.
The email, from Federal Student Aid, referred to the one-time relief plan that the Biden administration rolled out in August and – in recent months – put on hold following legal challenges.
Many borrowers are in limbo as a result of this email, according to Persis Yu, deputy executive director and managing counsel.
The email on Tuesday may not seem like much, but borrowers are trying to figure out what to do next. They’re hanging on the words and they matter.
Carolina Rodriguez said she hears that sentiment when she speaks to her clients at the Education Debt Consumer Assistance Program in New York. The borrowers are confused about what to do during the waiting period, and have reached out to confirm that they can’t.
The Supreme Court will hear the case early February and probably make a decision sometime this spring, meaning that borrowers will be stuck in limbo for a few more months.
In 2020, as the Covid pandemic began, the Department of Education paused payments and interest in accrual on student loans to help those struggling financially. As the pandemic progressed, both the Trump and the Biden administrations further extended the protections.
The Public Service Loan Forgiveness program is designed for certain government and nonprofit employees but has had many problems over the years.
The mired rollout of Biden’s forgiveness program has created confusion for borrowers. There are many big questions surrounding student loans this year.
A decision is expected in June on the legality of the program. No debt will be discharged under the program while it is on hold.
Federal student loan borrowers start a new year with no need to make payments on their loans due to the H1N1 flu.
The yearslong pause cost the government $155 billion through the end of 2022, according to an estimate from the Committee for a Responsible Federal Budget.
New Rules for Payments Under the Public Service Lifetime Program and Their Effect on the Borrower Eligibility with Deferments or Forbearance
A yearlong waiver that expanded eligibility for the PSLF program expired on October 31, but some of those temporary changes will be made permanent starting in July.
Under the new rules, borrowers will be able to receive credit toward PSLF on payments that are made late, in installments or in a lump sum. Prior rules only counted a payment as eligible if it was made in full within 15 days of its due date.
Time spent during periods of deferment or forbearance will count. There are periods that include deferments for military service and time served in AmeriCorps and the National Guard.
The rules will make it simpler to meet the requirement of being a full time employee in a public sector job. The new standard will look into full-time employment of at least 30 hours a week. In particular, the change will help adjunct faculty at public colleges qualify for the program.
The Department of Education expects to start implementing some parts of the new income-driven repayment plan later this year. But first, the proposal is going through a formal rulemaking process, having received more than 13,000 public comments, and changes may be made to the proposal before it takes effect.
Stocks, the Bell, and the Market: What is going on in the U.S. Stock Market During the First Three Months of 2019?
A version of this story first appeared in CNN Business’ The Bell newsletter was before that. Not a subscriber? You can sign up right here. You can also listen to an audio version of the newsletter.
The possibility of a 2023 market rally ground to a halt last week as investors worried about inflation and economic data and the possibility that the Federal Reserve will continue hiking rates for longer than expected.
On Friday, the major indexes recorded their largest losses of the year. The S&P 500 dropped by more than 2%. The tech-laden NASDAQ fell while the blue-boarded Industrial Average sank.
What’s happening: The pace of inflation is not moving in a straight line. January’s Personal Consumption Expenditures price index – the Fed’s favored inflation gauge – came in hotter than expected on Friday.
The bureau of economic analysis reported that prices rose in January from a year earlier. In December prices rose 5.3%.
Source: https://www.cnn.com/2023/02/26/investing/stocks-week-ahead/index.html
Inflation will not quit: The US economy is on the verge of a new financial crisis, and it is still facing a credit crisis
A paper presented Friday at the Booth School of Business Monetary Policy Forum in New York argued that disinflation will likely be slower and more painful than markets anticipate.
“Significant disinflations induced by monetary policy tightening are associated with recessions,” said the paper. It would be unprecedented to have an immunity disinflation. In this case, the possibility of inflation falling quickly to the Feds 2% goal without any serious economic damage is said to beculate.
The presidents of the Fed and governors were on hand at a forum at the Booth School to discuss monetary policy. Most of those speaking worried about the stubbornness of inflation and general market reaction.
Inflation won’t quit: Cleveland Fed President Loretta Mester said that while price growth has moderated from its recent high, the overall pace of inflation remains too high and could be more persistent than her colleagues currently anticipate.
Boston Fed President Susan Collins said at the conference that she anticipates further rate increases to reach a sufficiently restrictive level and that they will be held there for some time.
Fed Governor Philip Jefferson struck a more befuddled stance on Friday, observing that inflation continues to baffle economists. He said that the inflationary forces impinging on the US economy at present were a complex mixture of temporary and more long- lasting elements. Parsimonious is a million-dollar word.
Economists stressed that more pain lies ahead. “It’s important that markets understand that ‘no landing’ is not an option,” said Peter Hooper, vice chair of research at Deutsche Bank, an author of the report.
While recent data has signaled that the US economy remains strong, “by the time we get to the middle of this year we expect to see some bad news coming and the sooner the markets get that message the more helpful it will be to the Fed,” he said.
Lord King summed up what many people were thinking. I wouldn’t want to give advice to any central banks about what to do due to the current monetary situation.
If President Joe Biden’s student loan forgiveness plan doesn’t come to fruition, the US could face another credit crisis according to researchers at the Federal Reserve Bank of New York.
That forgiveness proposal is now on hold after an injunction by the 8th US Circuit Court of Appeals. The case will be heard by the Supreme Court of the United States in June.
The Problem of Student Loans, Mortgages and Loans: Implications for the Federal Government and the Development of the Guaranteed Student Loan Program
“We note a stark increase in new credit card and auto loan delinquency for borrowers with eligible student loans over the past few quarters, growing at a faster pace than those without student loans and those with ineligible loans,” they wrote.
The data shows that it could be related to problems to come, a sign of economic distress that could be particularly concerning when student loan payments resume.
All debt isn’t created equal. Students who take out loans to get, say, business degrees from top universities find themselves in a very different position from students who attend predatory for-profit institutions and wind up with degrees that aren’t worth all that much – if they end up with degrees at all. A great many students who take out student loans don’t graduate, leaving them in the worst of all positions: In debt, but with no degree to show for it.
College graduates do earn more than those who do not have a degree. When calculating median salaries, the Bureau of Labor Statistics shows that in 2021, full-time workers 25 and older with a bachelor’s degree out-earned those without a high school degree by $27,000 annually.
College costs have risen more than inflation according to the Institute for Higher Education Policy.
In the 1968- 1969 academic year, adjusted for inflation, it cost $1,545 to attend a public four-year institution. This includes tuition, fees, room and board. That’s compared with $29,033 in the 2020-2021 school year, data shows.
The National Student Loan program, aimed at expanding access to higher education, was launched in 1958. It was the first federal student loans initiative for those studying certain subjects during the Cold War to improve science, mathematics and engineering skills.
“The Guaranteed Student Loan program is really the big original student loan program, and it was modeled off the mortgage program,” said Elizabeth Shermer, a historian and associate professor at Loyola University Chicago who has researched and written about student loans.
The government was able to solve the problem of how to get banks involved in such a risky financial investment by promising to repay them.
Using the federal mortgage program as a guide allowed the government to avoid direct investment into colleges, she said, but mortgages and student loans are not the same. The federal government can’t take away your degree the same way a bank can take your house.
“Instead, this assumption being that it is un-American to have a free ride, so we will use the lending that turned a country of renters into a nation of homeowners. The same thing happened with the student loan programs just like it did with the mortgage program.
Modeled from Fannie Mae, a program created during the Great Depression that made it easier to buy and sell mortgage debt in order to create more reliable funding for housing, Sallie Mae started offering private student loans along with other financial products.
This was the “most important” moment in the history of loans, she said, as the availability of financial aid products to both for-profit and nonprofit companies allowed for the rise of private student loans.
That coupled with the rising cost of tuition in the 1970s meant that students needed more money to continue their education. Since there was a limit to how much students could borrow in federal loans, private loans were needed as a supplement.
“It really is going to be this expectation that you are going to need to borrow something to get through college,” Shermer said. She said that the storm was like a perfect storm.
“As every legislature knows, if you cut the appropriations for higher education, colleges and universities can just increase what they charge. Just increase tuition,” Shermer said.
The federal government would save money if it just lent directly to students and parents after one of the student lenders went bankrupt.
Another type of income-driven repayment plan, the Income-Based Repayment Plan, or IBR, was created in 2007. The cap was lowered to 15% of discretionary income, and the loans balance was forgiven after 25 years of payments.
The Pay As Youearn program provides guidelines that many borrowers still use today, including caps on payments at 10% of discretionary income and cancellation of loans after 20 years.
The Supreme Court rejected the eviction moratorium on a loan forgiveness plan for the Biden administration in the aftermath of the Pandemic
Even if the one-time loan forgiveness program is rejected by the Supreme Court, the proposed repayment plan is less likely to face the same legal challenges.
The plan would cap payments at 5% of the borrower’s discretionary income, create a shorter time to forgiveness and cover unpaid monthly interest when balances are low.
The Republican talking point on this case is that Biden’s plan is a massive taxpayer giveaway, and that he cunningly used Covid as an excuse to push through a policy Congress would have never approved. Even if it means making the rich pay more in taxes, why wouldn’t Congress act to relieve student debt and improve the economic and personal futures of many young people?
The court in 2021, invalidated the Biden administration’s Covid-19 related eviction moratorium that was issued by the US Centers for Disease Control and Prevention holding that the program needs to be specifically authorized by Congress. In 2022, the court blocked a nationwide vaccine or testing mandate for large businesses, sending a clear message that the Occupational Safety and Health Administration had overstepped its authority.
Tuesday’s cases will also highlight an important threshold question that could block the court from reaching the merits of the dispute: whether the parties behind the challenge have the legal right, or “standing,” necessary to bring suit.
The initiative was immediately attacked. A district court blocked the program citing the so-called major questions doctrine. The doctrine says federal agencies can’t regulate matters of “vast economic and political significance” without congressional approval.
The Supreme Court in June of last year made it easier for supporters of the doctrine to argue that the EPA should not regulate carbon emissions from existing power plants.
The oral arguments were in two cases challenging the program: one brought by a group of Republican-led states and the other brought by two individuals who did not qualify for the full benefits of the forgiveness program. The justices of the conservative court were worried about fairness, overreach and the mechanics of states being able to bring a suit.
The president issued an extension due to the fact that the loan forgiveness program was in limbo and that they were supposed to resume in January.
The Biden administration believes the secretary of education had the authority to give relief to people with less than $125,000 per year in income, so they wouldn’t be hurt by the Pandemic.
Justice Sotomayor was interested in the millions of people who might get their debt forgiven. Many of them didn’t have the same support lines during the pandemic that others had.
HEROES Act and a Student Loan Crisis: State and Local Laws in the Era of Student Loan Obsolescence with the Biden Administration
She said the agency used statutory language that was ambiguous, cryptic, ancillary, or modest and that the grant of authority is central to the HEROES Act.
In addition, she said that neither the states nor the two individual plaintiffs behind the challenges have the standing to file suit. She warned that if the justices held otherwise, it could have “startling implications” going forward.
“Virtually all federal actions – from prosecuting crime to imposing taxes to managing property – have some incidental effects on state finances,” she said.
As for the states, Nebraska Attorney General Michael T. Hilgers, who is also representing Missouri, Arkansas, Iowa, Kansas and South Carolina, stressed that the Biden administration exceeded its authority by using the pandemic as a pretext to mask the true goal of fulfilling a campaign promise to erase student-loan debt.
The major questions doctrine was triggered by the cancellation of hundreds of billions of dollars in student loans, and Hilgers told the court. Such a cancellation power “is the type of major question that courts presume Congress reserves for itself.”
Hilgers rejected the government’s contention that the states can’t show the harm necessary to get into court. In court papers he put forward multiple theories of standing that mostly revolve around the theory that the states will lose tax revenue.
The federal court focused on one of the states behind the challenge, Missouri, and the fact that a state created entity has contract with the federal Department of Education to service student loans. Because of the new plan, Mohela wouldn’t be able to fulfill its obligation to contribute a certain amount of money to the state treasury, according to the court.
The red states are supported by a group of former government officials including former Trump Attorney General William Barr, former Trump White House chief of saff Mick Mulvaney and others who say that Biden should not be able to forgive billions of dollars in student loan debt “owed by 43 million borrowers who financed a college education with the benefit of tax payer-funded loans.”
While the Biden administration is aggressively defending the program in court, the president did not announce the program until August 2022, and then only under pressure from the left wing of his own party.
The case of the Biden plan has been put on hold by two lower courts, so no money has yet been paid. The Biden plan is being challenged by six states and the justices will hear expedited arguments on Tuesday.
Yes, says University of Texas law professor Stephen Vladeck, who consulted informally with the White House on the case. He says the statute is clear and expansive.
“This is a broad amount of authority from Congress for the secretary of education” he says. The plain text of the statute is “not vague when it talks about the secretary’s power to waive or modify any statutory or regulatory provision applicable to programs like federal student aid.”
But Case Western University law professor Jonathan Adler says waiving or modifying loan requirements is not the same thing as canceling the obligation to pay back some or all of a loan.
The High Court Benchmark for the Biden-Covid Proposal to the Second Session of the Commission on Constitutional Laws and the Second Amendment to the Constitution
If the justices decide that the states don’t have the right to do anything because they can’t show any harm, the case will be even more significant.
The policy was challenged by six Republican governors and two debt holders. Their argument is essentially that this program is beyond the scope of Biden’s power; he’s using Covid as a pretext, they say, for a law that should be approved by Congress. In the oral arguments in the two challenges to Biden’s plan, the Court’s conservative justices seemed sympathetic. The case “presents extraordinarily serious important issues about the role of Congress,” Chief Justice John Roberts said, adding, “We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse.”
The numbers of these lawsuits is skyrocketing, and it is at least possible that the Supreme Court would like to see fewer of them. The doctrine of legal standing should be limited in order to do that.
Legal standing means that to get in the courthouse door, a state has to show that its citizens have been harmed in some concrete way. The question is whether the states have shown that.
It’s harder to challenge a governmental action that harms someone else than it is to challenge a governmental action that harms you. The states had to be creative in finding out how to identify an impact on them from the forgiven student loans to other people.
Student Loans, Debt, and the Prevalence of the Pandemic. Commentary on a Paper by Sloane Vaclavevich
Professor Vladeck thinks that won’t fly because it it purely speculative. He pointed to what the Supreme Court has said over the course of a decade, “future injury can’t be the basis to sued unless it is imminent.”
Student loan forgiveness is a topic likely to be raised at Tuesday’s argument. After all, the premise of the loan program is that younger people with loans, in particular, have suffered economically during the pandemic, and are in desperate need of some loan relief. But Biden has announced that the pandemic emergency will end May 11. The administration claims that the effects of the Pandemic will continue after the emergency is over. At minimum, though, that argument could find some stiff headwinds at the Supreme Court.
The one-sided politics of the debt forgiveness plan did not sit well with some Supreme Court justices, who are skeptical of the authority of Biden to do things on his own.
There are valid questions and the idea of debt forgiveness splits the country in half. In the national exit poll for the mid-term election in 2020, 50% of voters were Democrats and 45% were Republicans, with Biden’s debt relief plan approved by 50% of them.
She said they didn’t have friends or family who could help them make the payments. Those debtors will suffer in ways others won’t because of the pandemic, she said.
Since graduates make more money than the non- graduates, it’s a good idea to take on debt. Debt can cause problems for a long time. Nearly a quarter of debt is owed by people age 50 and older.
Students who don’t have a diplomas are typically vulnerable in other ways, because of their debt. It is more likely for borrowers to default on their loans than it is for students to graduate from a for-profit school and never complete their degree.
Biden’s proposal would be a big step but less complete than a congressionally approved program, and it would only take a bit out of the larger balance sheet and not address the problem of the cost of college.
Supreme Court Student Loan Forgiveness What Matters: Why We Are Tracing Water, How We’re treading Water
These are people from every part of the country, a point the White House tried to make when it released a list of applicants by congressional district.
During arguments, Chief Justice John Roberts said that something that is going to affect a lot of people should be in the hands of Congress.
“And if they haven’t acted on it, then maybe that’s a good lesson to say for the president or the administrative bureaucracy that it’s not something they should undertake on their own,” Roberts said.
I have taken out a lot of loans. … I’m out here trying to just go through college without having to stress about all the payments and everything else,” Perry said.
I was telling a story that was no different than the other ones. This is a systemic crisis – a nearly $2 trillion crisis burning people from every walk of life,” the Massachusetts Democrat said.
“Like those millions of Black borrowers – and I was growing up in single-parent household – and given financial strain, I had no choice but to take out those loans. I had to go through a lot of trouble to repay those loans, but it took me 20 years to do so. I was employed and often living check to check. and I simply could just not make ends meet. She said she just couldn’t get ahead.
“And despite people’s Herculean efforts working multiple jobs, given rising costs, people are treading water. They’re treading water, and we can do something to alleviate this burden and this hardship,” she said.
Source: https://www.cnn.com/2023/02/28/politics/supreme-court-student-loan-forgiveness-what-matters/index.html
The Red State Question: Whether the Supreme Court will grant standing to the red states? An opinion piece from a New York Times bestselling author
If the Supreme Court grants standing to the red states, it could open the door for a new era of legal challenges in which the states overload the legal system, according to a CNN legal analyst.
“Does their hostility to this program lead them to really weaken the historical limits on standing?” Justices will have to decide if this is a political issue that should be decided at the ballot box or not.
The journalist and author of the book “OK Boomer, Let’s Talk: How My Generation Got Left Behind” is based in New York. Follow her on Twitter. The opinions expressed in this commentary are of her own. View more opinion on CNN.
He has a point: The US government was indeed set up to separate and balance powers, and to avoid unilateral executive action – the Founders gave us a president, not a king.
The Case of a Student Loan Involvement Involving a Conservative-Centric Supreme Court: Is the U.S. Supreme Court Enough?
The case may fall apart because of the issues with the people who are part of it. In order for a court to hear a case like this one, the individuals or entities suing have to have suffered some actual harm – they can’t just dislike a law or policy, they have to be negatively affected by it. If Republican governors met the threshold to file the lawsuit, the court will have to consider it.
If the student loan forgiveness program is abolished by the Republican governors, the winners will be indebted students, not the GOP.
An 18 year old who spent four years accumulating credit card debt can discharge the debt in Chapter 11 if they go on a vacation, buy a luxury car and dress up. The only way for an 18-year-old to pay for school is to sign a $100,000 loan agreement with a 7.5% interest.
But we should be concerned about overreach from a conservative Supreme Court, too, as well as a student loan system that places heavy financial burdens on young people as soon as they embark on their adult lives.
Twenty-six million Americans are waiting to see if the US Supreme Court will allow a plan to cancel some student debt to move forward. The trillion-dollar mess is still circling it, and a cohort of startups looking for opportunity amid the crisis.
The student lending industry has gone largely undisrupted. Companies like Sallie Mae (which began as a government entity servicing student loans) and its spin-off Navient have dominated. Loan refinancers have been problematic, making money off people who want lower interest rates without understanding the full implications of their loan consolidation.
