Saturday, July 20, 2024

Supreme Court poised to sink student loan waivers

WASHINGTON (AP) — Conservative justices hold the majority of the Supreme Court President Joe Biden’s plan to eliminate or reduce student loans is likely to sink Held by millions of Americans.

In arguments that lasted more than three hours on Tuesday, Chief Justice John Roberts led his conservative colleagues to question the administration’s authority to broadly cancel federal student loans because of the Covid-19 emergency.

The plan has so far been blocked by Republican-appointed judges in lower courts.

It’s unclear whether any of the six justices appointed by Republican presidents would approve the debt relief plan, though Justices Brett Kavanagh and Amy Coney Barrett appeared more receptive to the administration’s arguments.

The only hope of being allowed to move forward with Biden’s plan seemed to be the slim possibility that the court would find, based on the arguments, that Republican-led states and individuals lacked legal standing to sue the plan.

That would allow the court to dismiss cases at a threshold without ruling on the basic idea of ​​the loan forgiveness program, which appeared to trouble justices on the right side of the court.

Roberts was one of the justices who grilled the Biden administration’s top Supreme Court lawyer, Elizabeth Preloger, and suggested the administration overstepped its authority on the plan.

Roberts pointed to the broad impact and cost of the plan, three times saying it would cost “half a trillion dollars.” The project is estimated to cost $400 billion over 30 years.

“If you’re talking about this in the abstract, I think most casual observers would say you’re going to give up so much … money. If you’re going to affect the obligations of so many Americans on something that’s so controversial, they’re going to think that’s something for Congress to act on,” Roberts said.

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Cavanaugh suggested the administration was using “old law” to unilaterally implement a debt relief plan that Congress had rejected. “The administration is making a big new plan after Congress didn’t authorize the action,” he said.

That, he said, “seems problematic.”

Kavanagh noted that the administration is citing a national emergency created by the coronavirus pandemic as authority for the debt relief program. He argued that “some of the best moments in the Court’s history” are “pushing back against the president’s assertion of emergency power.”

At another point, however, Cavanaugh suggested there might be a better fit between the program and the authority granted by Congress than the court’s conservative majority has ended other pandemic-related programs. Vaccinations or frequent testing in large workplaces.

The pandemic-induced moratorium on loan repayments could end this summer unless the program is allowed to run three years earlier, as Prelogger told judges that “defaults and delinquencies will rise above pre-pandemic levels.”

“States are asking this court to deny this vital relief to millions of Americans,” he said.

The administration says 26 million people have applied for up to $20,000 in federal student loan forgiveness under the program.

“I believe there is legal authority to implement that plan,” Biden said Monday.

The president, who once doubted his own authority to broadly cancel student loans, first announced the plan in August. Legal challenges quickly followed.

Lawmakers in Republican-led states and Congress, as well as conservative legislative interests, have lined up against the plan as a clear violation of Biden’s executive authority. Democratic-led states and liberal interest groups are backing the administration in urging the court to allow the plan to go into effect.

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The 2003 law, commonly known as the HEROES Act, allows the education secretary to waive or modify the terms of federal student loans in connection with a national emergency, the administration says. The law was primarily intended to ensure that members serving in the wars in Afghanistan and Iraq were not financially disadvantaged.

Nebraska and other states that have sued say the plan is not needed now to keep defaults where they were before the pandemic. States say 20 million borrowers will have their entire loans wiped out, taking a “windfall” from what they were before the pandemic.

“This is the creation of a brand new program that is beyond the intent of Congress,” Nebraska Solicitor General James Campbell told the court on Tuesday.

Dozens of borrowers from across the country camped out near the courthouse on a wet Monday evening, hoping to find space for arguments. Among them was Cinyetta Hill, who said Biden’s plan would wipe out all but $20,000, or $500, of his student loans.

“I was 18 when I joined college. I didn’t know it would be such a big burden. No student should have to face this. No person should have to face this,” said Hill, 22, who plans to study law after graduating from the University of Wisconsin-Milwaukee in May.

Previous programs that were halted by the courts were mostly billed because of public health measures aimed at slowing the spread of COVID-19.

The loan forgiveness program, by contrast, aims to counter the economic effects of the pandemic.

The national emergency is expected to end on May 11, but the administration says the economic effects will linger, despite historically low unemployment and other signs of economic strength.

In addition to the debate over the power to forgive student loans, the court faces challenges before the justices to whether states and two individuals have legal standing or can sue.

In order to sue in such cases, the parties generally must show that they will suffer financial harm. A federal judge initially found the states harmless and dismissed their case before saying the appeals panel could proceed..

Barrett joined three liberal justices in repeatedly questioning Campbell on that issue. But at least one conservative vote would be needed to form a majority.

Of the two individuals suing in Texas, one consists of commercially held student loans, and the other is eligible for $10,000 in debt relief, not the $20,000 maximum. If they win the case they get nothing.

Let’s hear the arguments live AP YouTube Channel or on Website of the Court.

A decision is expected by the end of June.

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Associated Press writer Colin Binkley contributed to this report.

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