Will Biden’s Student Loan Forgiveness Plan Stand?

The Supreme Court considers the program Tuesday.

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Student loan borrowers stage a rally in front of the White House in August 2022 to celebrate President Joe Biden cancelling student debt. (Photo by Paul Morigi/Getty Images for We the 45m)

President Joe Biden’s plan to unilaterally forgive hundreds of billions of dollars of student loan debt will get its day before the Supreme Court on Tuesday when attorneys make oral arguments.

The COVID-19 pandemic prompted Trump administration officials to issue a moratorium on federal student loans’ interest accrual repayments. But Biden’s move in August to cancel outright billions of dollars in debt—after initially extending the moratorium—pushed the bounds of executive authority to new levels. Biden’s plan would cancel up to $20,000 in federal student loans for as many as 26 million eligible borrowers (though most borrowers are expecting closer to $10,000 to be forgiven). The cost of his plan clocks in at an estimated $400 billion over 30 years, according to the nonpartisan Congressional Budget Office.

But lower courts blocked the move after legal challenges, and the administration stopped accepting new applications in November. The Supreme Court agreed to fast track the issue and will hear arguments from two lawsuits that challenge the plan.

Two cases, one issue.

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  1. Avatar photo
    BloggerBarbie

    I feel like we've reached a point with undergraduate education where we have two choices.

    1. Dial back our dependence on it, which would be ideal, but I can't see it happening. The idea that "denying" college to someone is a grave injustice is very deep in the culture and I imagine that any pushback on it will lead to accusations about how we're reserving decent education for the children of rich. This would not be entirely without merit, either. Why should a rich kid with a so-so brain be able to get a solid education while a poor kid with a great brain is told, "Too bad, so sad, you don't *really* need all that fancy stuff anyway"?

    2. Create grades 13-16 as part of the public school system, since so many things require the bachelor's degree. This has precedent--high school used to be the fancy continuation after eighth grade, but now it's just part of life. Of course, this contributes to the escalation--if high school weren't mandatory and people were told, "Eh, eighth grade is enough," then maybe people with that eight grade education would (a) get a better 8th grade education and (b) be able to get a job... but that ship sailed long ago. My impression is that grade 16 education ship is also long sailed away toward the horizon, and now it's just a question of figuring out how to handle it in a more humane way.

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  2. Avatar photo
    Ben Connelly

    If SCOTUS doesn’t let Biden’s unconstitutional action stand, that could be the beginning of a badly needed reduction in executive power and a return to constitutional normalcy.

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  3. Michaeldhornback

    I have a simple question. Why only 10k? What was the limiting principle that caused the administration to stop at that amount?

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  4. Jim.H

    It’s not a “forgiveness” plan….if it were, we the taxpayers would not be the ones paying for this.

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  5. Avatar photo
    BloggerBarbie

    Caveat: I just had my loans forgiven on the Public Service Loan Forgiveness program (Eg, work a public service job for ten years while making payments, and the rest is forgiven... of course, I worked for over twenty because for years, it was almost impossible to actually get approved for it. The idea being that they're trying to incentivize working at the low paying jobs that require degrees.)

    If loan forgiveness came with some serious reform, it might be a good idea. The loans are made to people who just became old enough to sign for them, have no way to handle them if there's a bankruptcy, and are made for something that people have been convinced is both necessary and ultimately profitable... without any guidance on how to use them. If there is loan forgiveness (in one jubilee year), then it should come with reforms like, say, having the colleges who benefit from it be responsible for making sure their students actually graduate with both skills and networks--in other words, they guarantee the loans, and if their alumni aren't able to repay, it's the schools that are on the hook for it. That should cause an immediate improvement in academic advice and career guidance. This is especially important for the first generation students who are the ones, imho, most likely to get snookered. A huge point of college is developing that alumni network, but when I went to undergrad, the career center was a couple of rooms full of binders of alumni who might or might not respond, and a pair of clerical workers who kept track of them and just shrugged if you said, "What can I do with X?" Meanwhile, what I had been sold was, "It doesn't matter what your major is... if you get a bachelor's degree, you can do anything!" A couple of years later, it was, "Well, it doesn't matter what your UNDERGRADUATE major was, for heaven's sake, you need to go get your Masters." And when I told someone who worked in financial aid (a roommate of mine) that I'd gotten a terminal Masters, she laughed and said, "That's what they use as a cash cow--if you'd gone for a PhD, you wouldn't have all these loans. Colleges figure that those professional programs are people who will take on anything to get their credentials."

    It is a racket, and kids have gotten swindled, and I could see a case for saying, "That's it, we're fixing this so people can think about buying a house before they're sixty," but ONLY if it comes with serious reform to the system.Expand full comment

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    1. BenP

      I agree that some reform should be attached, but we have to be very careful about what we incentivize colleges to do. Tying money to graduation rates will result in some combination of lower academic standards for graduating and higher standards for being admitted. High school students who are identified as having a lower probability of graduation will find it harder to get into college, and colleges will be less willing to take a chance on them. I don't think there's much more colleges can do to improve students' academic performance other than lowering standards - as it stands they've invested a whole lot more than they did in the past into support services and tutoring centers. And lowering standards will only exacerbate the trend of "you need a masters degree to work here", as the value of the bachelor's goes down.

      I don't have a solution. The problem, as I see it, is that there are too many people in college who don't really want to be there, and are there due to some combination of parental expectations, social pressure, and inertia. A grown adult would not take out $70k in loans to spend four years doing something they have no interest in doing, but an 18 year old will, and they've been let down by the grown adults who enourage them to do it, genuine interest in going to college be damned. My ideal scenario is we quit sending the message that everyone needs to go to college, and quit with the lazy elitism that judges those who don't. Easier said than done in our "information economy" where more and more employers require a degree.

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      1. Avatar photo
        BloggerBarbie

        I wasn't thinking of tying it to graduation rates--I was thinking of tying it to something concrete, like job placement (or placement in the next track, like med school or law school or library school or whatnot). I agree that graduation rates would just cause lowering of standards, and that's not really the problem. So, say, a freshman or sophomore says, "I want to major in drama." The school not only provides classes, but has connections with alumni in the field, who help with finding agents and explaining how the business works--it's not exactly intuitive--and getting the student relocated, explaining how expensive the cities they'll need to live in will be, etc. A student says, "I want to major in history," then work with the academic advisors relevant to that, and, since there simply aren't enough academic history jobs out there, work on practical career advice, not to discourage the major (Lord knows, the last several years have shown that we need people who understand the humanities), but to say, "What would you like to do with your life after you've finished your studies?" Which might mean prepping for the LSAT or getting work experience. (PAID work experience. Unpaid summer internships are the bane of existence--taking place in expensive cities that effectively restrict these useful little networking opportunities to rich kids whose parents can pay an extra rent for two months. The rest of us had to spend summers working under the table for dry cleaners to help cover the rent at home. Er, not that I'm speaking specifically or anything...)

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  6. Johnnyberge

    I have absolutely no idea what the legal merits are of the cases, but from a political perspective it seems that the Biden Administration is an a good position for almost any outcome from the court. If SCOTUS allows the program to continue, then that is an obvious win for Biden. If the SCOTUS conservative majority deems the program illegal for whatever reason, then Dems will blame the conservatives on the court for cancelling the programs in a partisan manner, and offer it as one more reason for college educated voters to vote Dem.

    If SCOTUS rules against the program by a large, bipartisan majority, then that will reflect poorly on Biden.

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    1. Nicco

      Your last sentence is the unlikeliest scenario. Any Justice who wants it has an easy out on the standing question. I can’t see the Dem appointees getting past that to the merits of the case. It’ll be 6-3 or even 5-4 if they strike it down. My money is on 6-3 or 5-4 the other way.

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  7. Bubba

    Suspending payments and waiving interest are all consistent with common practice during emergencies. Mortgage payments are often suspended during a hurricane disaster, for example.

    An outright waiver of the balance… c’mon man!

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    Pat Riot

    Hopefully the SC knocks this down, and hopefully it's bipartisan.

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  9. James Morphew

    It is disappointing that our last remaining defense against such an unconstitutional usurpation of power is nine justices in black robes.

    It is so apparent that our legislature is now impotent as well as incompetent.

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    1. DTruitt

      Congress has no power of enforcement when the administrative branch exceeds its powers - that is what the courts are there for, and they're doing exactly what the Constitution intends.

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      1. Stormer93

        They have the power to impeach an executive branch that abuses or usurps it's authority. Whether or not politics will allow this is another matter.

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    George.Skinner

    These cases seem to have arisen because of some degree of bad faith on both sides: the Biden administration for seeking a contrived way of spending a huge amount of money on student loan forgiveness without congressional approval they'd almost certainly fail to receive, and constructing it in a way to avoid standing for any legal challenges. Then the opponents who've developed some pretty contrived arguments for standing in order to challenge the student loan forgiveness, and judges who apparently have bent precedent to allow the cases to proceed. It's all tremendously corrosive to the rule of law, and could've been avoided at any number of points - principally Biden himself if he'd just stuck to saying "No."

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