Biden Student Loan Forgiveness Plan Faces Mounting Challenges, Skepticism from Supreme Court

Biden's signature student debt forgiveness plan faces a rocky forward path as the Supreme Court expressed skepticism over it's legality during Feb. 28 arguments. Photo by Emily Stellakis 24’.

President Biden’s plan to cancel or reduce student debt for tens of millions of Americans is facing a tenuous fate the Supreme Court appeared increasingly skeptical of the program’s constitutionality in recent oral arguments. 

On Feb. 28, the Court weighed the legality of Biden’s unprecedented move to offer $20,000 of loan forgiveness per borrower via executive order. The plan, one of Biden’s central campaign initiatives, was introduced last August and is on hold as the high court debates the case.

Several justices signaled they are skeptical the Education Department has the authority to wipe $400 billion in federal student loans, as the administration claims cover under the HEROES Act. The 2003 law grants the Education Secretary authority to "waive or modify" the terms of existing federal student loans during a national emergency.

In oral arguments, which extended well past the allotted two hours, the Court’s justices expressed doubt the president could enact such sweeping and expensive policy without congressional authorization. The court heard arguments in two cases: one brought by six states, including Missouri, and the other brought by two holders of student debt, Myra Brown and Alexander Taylor.

Chief Justice John Roberts was particularly hostile toward Biden’s plan, repeatedly drawing attention to it’s price tag — “about half a trillion dollars” — and raising questions about its fairness.

"We're talking about half a trillion dollars and 43 million Americans," said Chief Justice Roberts. "I think most casual observers would say, if you're going to give up that much amount of money, if you're going to affect the obligations of that many Americans on a subject that's of great controversy, they would think that's something for Congress to act on."

Four of the conservative justices – Roberts, Samuel Alito, Clarence Thomas and Neil Gorsuch — appeared most doubtful of administration’s legal footing for the debt forgiveness plan, while all three of the court’s liberals seemed poised to reject the challenges to the plan. The conservative justices indicated they may decide the case based on an emerging legal argument called the “major questions doctrine.” Under the doctrine increasingly favored by the right, federal agencies cannot pursue matters of vast economic and political significance without express authorization from Congress.

Justice Amy Coney Barrett expressed doubt over the GOP states’ arguments that they had legal standing to bring the lawsuit. A key question is whether the challengers even have the standing to sue over the plan in the first place. The most probable Biden administration win would be on technical grounds if the Court rules that the plaintiffs in the case — Republican state attorneys general and the two student loan borrowers — do not have the proper standing to sue.

If the Court rules that the plantiffs have the legal standing to bring the suit, it would set a significant legal precedent that would redefine the limits of presidential power. 

The ruling will likely have serious political implications for the president as he is likely to pursue a second term. Student loan forgiveness was one of his most notable platforms to court an important constituency ahead of the 2024 cycle: young Americans. 

President Biden recently expressed concern that his plan may be struck down in the high court. “I’m confident we’re on the right side of the law,” Biden told CNN. “I’m not confident of the outcome of the decision yet.”

The Biden administration received 26 million applications for the program and more than 16 million applications had already been approved. While federal student loan payments are currently paused, that will end 60 days after the case is decided; if the case hasn’t been resolved by June 30, payments will start 60 days after that.

A decision is expected by the end of June.