Millions of student loan borrowers could see up to $20,000 of their debt canceled depending on the outcome of Tuesday’s US Supreme Court hearing on President Joe Biden’s student loan forgiveness program.
How and when the justices rule will also determine when payments on federal student loans will resume after a pandemic-related pause that has been in place for nearly three years.
The Biden administration has said that payments will resume 60 days after litigation over the forgiveness program is resolved or at the end of August, whichever comes first.
Biden announced the targeted student loan forgiveness program last August, but the implementation was put on hold by lower courts before any debt forgiveness was granted.
The justices will hear arguments in two cases Tuesday concerning the program, which is estimated to cost $400 billion.
One case was brought by six Republican-led states that say they would be harmed financially if the forgiveness program goes into effect. The other case was brought by two borrowers in Texas who don’t fully qualify for debt forgiveness under the program.
Plaintiffs in both lawsuits argue that the administration does not have the authority to cancel the student loan debt under the proposed rules of the program. But the Biden administration argues that a 2003 law grants the executive branch the power to discharge federal student loan debt in the event of a national emergency, including the Covid-19 pandemic.
There are about 43 million borrowers with federal student loans. Here’s what they need to know.
It’s unclear exactly when the Supreme Court will issue its decision, but typically the justices release their rulings by the end of the current term, which is usually in late June or early July.
If the Supreme Court rules that the Biden administration’s student…
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