US Federal Student Loan Relief: Another Plan while Ongoing Supreme Court Case is Pending . . . .
A New Federal Student Loan Program Will Move Millions Toward Forgiveness
Ann Carrns
Sat, March 18, 2023 at 11:15 PM GMT+9
The plan aims to fix “historical failures” and will provide debt cancellation to thousands of borrowers, according to the Education Department.
It’s unclear whether President Joe Biden’s student loan cancellation plan will survive a legal challenge now before the Supreme Court, but a different federal program may still offer relief to many borrowers. Some are already seeing relief under the program, and the government just extended a key deadline for some borrowers who must take special steps to qualify.
The help will come as a one-time adjustment to accounts of borrowers, some of whom have been making payments for decades. The adjustment will revise their accounts so that more of their payments will count toward the required number of payments needed to qualify for loan forgiveness.
The adjustment may benefit millions of borrowers, eliminating outstanding balances for some and moving many others closer to forgiveness of their remaining debt, the Education Department said when it announced the plan almost a year ago.
Some background: Income-driven repayment plans let student loan borrowers make lower monthly payments - in some cases, as low as zero dollars - based on their income and family size. Because the payments are low, they don’t often make much of a dent in the loan balance. But after making payments for 240 or 300 months (20 or 25 years), depending on the specific plan, the remaining debt is eligible for cancellation.
Now, under the new program, borrower accounts will be reviewed and updated, and credit will be given for months that didn’t previously count toward the maximum repayment period - such as certain periods of forbearance or deferment, when borrowers pause payments because of financial setbacks. (Periods when a loan was in default won’t count.)
Based on the adjustment, some borrowers who have reached the necessary threshold have already been notified that their loans have been discharged, an Education Department spokesperson said on Thursday in an email. More than 3.6 million borrowers will receive at least three years of credit toward forgiveness, the Federal Student Aid office has said.
The adjustment will apply even to borrowers who were not enrolled in income-driven plans, in recognition that many were not made aware of their options or were improperly steered away by their loan servicers, the Education Department said. In addition to correcting “historic inaccuracies,” the department said, it will create a new payment-counting process to avoid future problems. An online tracker is expected to be available this year.
The one-time revision will apply to all federally held student loans, including Plus loans, which are available to graduate students and to parents, to help them pay for their children’s college education.
Most account adjustments will happen automatically, according to the Education Department, but there are some exceptions. Older commercially held loans, such as Perkins loans and some made under the Federal Family Education Loan Program, can qualify for the one-time adjustment, but borrowers must first apply to consolidate them into a new direct federal loan. These borrowers can now apply for a consolidation loan until the end of the year, the department spokesperson said; previously, the deadline was May 1.
Borrowers with one-time payment adjustments that make them eligible for automatic loan forgiveness through the Public Service Loan Forgiveness program are being notified first, the spokesperson said. After adjusting those accounts, the department expects to next adjust accounts for borrowers eligible for forgiveness under income-driven repayment rules. The federal aid office has said that adjustments will occur this summer.
“Borrowers eligible for forgiveness will continue to receive discharges as they reach the required months of payments,” he said, “and will not be put back into repayment.”
Ashley Harrington, a senior adviser in the Federal Student Aid office, asked borrowers to be patient, and she suggested checking the government’s income-driven repayment website for news. (The site doesn’t necessarily flag updates, so borrowers should read carefully.) Harrington made her remarks on March 7 during a webinar hosted by Betsy Mayotte, the founder of the Institute of Student Loan Advisors, a nonprofit group that provides student loan advice.
The recent avalanche of student-loan-relief proposals, while welcome, have been difficult for people to keep track of, Mayotte said, adding, “It really has caused a lot of confusion among borrowers.”
Here are some questions and answers about the income-driven payment adjustment:
If the U.S. Supreme Court strikes down Biden’s loan-cancellation program, will the income-driven adjustment program continue?
Yes, according to student loan advisers; the programs are separate. The plan being reviewed by the Supreme Court would cancel as much as $20,000 in student debt for qualifying borrowers. If the justices reject that plan, the loan adjustment plan will remain available, Mayotte said. And if the court lets the president’s cancellation plan proceed, she said, borrowers may potentially benefit from both programs.
Is there a new income-driven repayment plan coming?
Yes. The Biden administration has proposed a new, more generous plan to replace the current income-driven plans, to simplify things for borrowers. The administration has said that it is aiming to start making some parts of the new plan available this year.
If I consolidate my loans to get the adjustment, won’t the clock for loan forgiveness reset?
No. Normally, a risk to consolidating student loans is that the forgiveness clock resets to zero, and borrowers must start over to accumulate credit toward cancellation of their balance. But that won’t happen under the adjustment plan, Harrington said during the webinar.
There are other important factors to consider, however, before consolidating. For instance, the interest rate on your new loan may be different, and your monthly payment may change.
Also, importantly, borrowers who consolidate federally held loans with loans that aren’t federally held in order to qualify for the adjustment may lose their eligibility for the one-time debt relief plan that is being considered by the Supreme Court, said Abby Shafroth, a lawyer with the National Consumer Law Center and an expert on federal student loans.
Borrowers who have only loans that aren’t federally held should “strongly consider” consolidating into a new federal loan before the deadline for the one-time adjustment, she said, as they’re not eligible for the $20,000 debt relief plan anyway.
For a smaller group of borrowers who have both types of loans (federally and commercially held), the decision is more complex. One approach, Shafroth suggested, might be to leave their federally held loans alone and consolidate only their commercially held loans into a new federal consolidation loan. With the consolidation deadline now extended, borrowers have more time to weigh their options and perhaps consider the impact of the Supreme Court decision, which is expected in the coming months.
How can I tell whether my loans potentially qualify for the special adjustment?
One way to tell, Shafroth said, is by confirming whether your loan payments have been suspended under the COVID-related pause that began in March 2020. If they were, your loans most likely qualify. If you are still being billed by your loan servicer, your loans are not federally held and you may need to apply for a consolidation loan.
Will the adjusted loan payments also count toward the Public Service Loan Forgiveness program?
Yes. Many borrowers submitted applications in the fall for a temporary waiver under the public service program, which forgives student debt after 10 years of repayment for borrowers working in government or nonprofit jobs. But if they missed that window to get payments that normally wouldn’t qualify toward forgiveness included, they might benefit from the income-driven adjustment, Mayotte said, as long as the borrowers were working in a qualifying job at the time of those payments.
c.2023 The New York Times Company
https://news.yahoo.com/federal-student-loan-program-move-141541488.html
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Supreme Court's conservative justices signal skepticism of Biden's loan forgiveness plan
John Fritze, Chris Quintana, Joey Garrison, Alia Wong and Nirvi Shah, USA TODAY
March 1, 2023·
WASHINGTON - The Supreme Court's conservative wing signaled deep skepticism Tuesday over President Joe Biden's plan to wipe away $400 billion in student loan debt, suggesting the administration may have overstepped its authority by creating a program estimated to benefit more than 40 million borrowers.
Over the course of several hours, a majority of the justices repeatedly turned to questions about the law Biden relied on to create the program - and whether the law gave him that power. The court will not issue its decision in the two cases until later this year and the position justices signal at arguments don't always predict the outcome of the case.
Six conservative states and two borrowers sued over the program and there has been considerable debate, heading into the arguments, over whether they were the right parties to sue. But that issue largely took a backseat to broader questions about Biden's authority.
"We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Cheif Justice John Roberts said. “This is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that significance."
Here's a look at what's happening at the Supreme Court.
Biden administration appeals to ‘high stakes’ as SCOTUS oral arguments conclude
The Supreme Court concluded oral arguments in the student loan debt forgiveness cases after three and half hours with Biden’s lawyer citing “the high stakes" in her closing remarks.
Pivoting from the legal arguments, U.S. Solicitor General Elizabeth Prelogar made an emotional appeal about the “tens of millions of student loan borrowers in this country” who were devastated financially by the COVID-19 pandemic. She said they will be hurt even more financially after Biden’s freeze on student loan repayments ends.
Ninety percent of the borrowers covered by Biden’s plan make $75,000 or less, she said. Twenty-six million Americans have applied for debt forgiveness and 16 million have been approved.
“For those Americans, this is a critical lifeline to ensure that they are not subject to the severe negative consequences of delinquency and default on student loan debt,” Prelogar said. “And the relief for these Americans has been held up by two student loan borrowers who don't even have standing and whose claims fail on the merits.”
- Joey Garrison
What is the Federal Family Education Loan Program? And what does it have to do with the mass forgiveness plan?
Myra Brown, one of the plaintiffs in the suit backed by the Job Creators Network Foundation, holds debt issued through the Federal Family Education Loan program.
This is a specific type of student loan backed by the federal government but held by private entities. The program has since been discontinued as the government now directly issues student loans. But many people still carry debt in the form of a FFEL loan.
Borrowers in the FFEL program were cut out of the administration’s mass debt forgiveness plan. When the plan was first announced, they had been able to consolidate their debts into a loan owned directly by the federal government. That transfer would then allow borrowers to access the debt relief program. But by Sept. 29, 2022, the administration barred FFEL borrowers from relief even through consolidation. That move followed one of the many lawsuits filed to challenge Biden's mass debt forgiveness plan.
MOHELA, the quasi-state agency based in Missouri, oversees these FFEL loans in addition to direct loans. The justices have debated what role the loan servicer should play in the litigation.
- Chris Quintana and Nirvi Shah
Elena Kagan, Ketanji Brown Jackson lean toward Biden plan on fairness concerns
Associate Justice Elena Kagan participates in a panel discussion with Hari Osofsky, dean of the Northwestern University Pritzker School of Law, in the Law School's Thorne Auditorium on Sept. 14, 2022.
Two of the high court's liberal justices, appearing to side with the Biden administration, pushed back at criticism from some of the conservative justices that the Biden student loan debt forgiveness program is unfair.
"Congress passed a statute that dealt with loan repayment for colleges, and it didn't pass a statute that dealt with loan repayment for lawn businesses,” Associate Justice Elena Kagan said. “And so, Congress made a choice and that may have been the right choice or it may have been the wrong choice, but that's Congress's choice."
Associate Justice Ketanji Brown Jackson also questioned the fairness argument. “I just don't know how far we can go with this notion of, to the extent that the government is providing much-needed assistance to people in an emergency, it's going to be unfair to those who don't get the same benefit.”
- Joey Garrison
How much would the student loan forgiveness plan cost?
Estimates for the overall cost of the program vary, but the Congressional Budget Office estimated the plan would cost about $400 billion. The agency, however, said its estimate was “highly uncertain.” The Committee for a Responsible Federal, a nonprofit, put the cost of the forgiveness plan at about $360 billion.
- Chris Quintana
More: Biden's student loan forgiveness will cost US about $400 billion, CBO estimates
John Roberts, Samuel Alito raise concerns about 'fairness' with Biden's plan
Chief Justice John Roberts raised what he called “the fairness argument,” echoing a common criticism from opponents of President Biden’s student loan program who argue it punishes Americans who couldn’t afford college or worked hard to pay off their loans.
Roberts introduced a hypothetical situation of two high school graduates, neither of whom could afford college. One took out a loan to attend. The other started a lawn care business with help from a bank loan instead of going to college. “At the end of four years, we know statistically, that the person with the college degree is going to do significantly financially better over the course of life than the person without,” Roberts said. “And then along comes the government and tells that person, you don't have to pay your loan.”
Roberts said the person who started a lawn care service still had to pay off their business loans “even though his tax dollars are going to support the forgiveness of the loan for the college graduate who is going to make a lot more than him over the course of his lifetime.”
Associate Justice Samuel Alito echoed those concerns. “I think it's a fair question to say, what is your client’s view about the fairness question that some people have posed, and that was really reiterated for you by the chief justice?
U.S. Solicitor Genreal Elizabeth Prelogar responded by saying that Congress, by passing the HEROES Act, has made the judgment that the education secretary can provide student loan relief during emergencies like the COVID-19 pandemic. “You can make this critique of every prior exercise of HEROES Act authority,” she said.
- Joey Garrison
John Roberts: 'More than half the people' don't need help on student loans
Chief Justice John Roberts pressed the Biden administration on its own findings that more than half of borrowers predicted they would be able to repay their loans - and suggested, given that, Congress should be the entity that decided how to structure the program. "If more than half the people say they don't need this relief, extending relief to that breadth certainly raises questions," Roberts argued.
Elizabeth Prelogar, the Biden administration's attorney, countered that in some higher income brackets that might be the case but not so much for Americans making less money.
- John Fritze and Joey Garrison
Crowd outside Supreme Court thins, though feelings on loan forgiveness remain strong
Maggie Bell, 24 and the organizer of a group called Cancel Loans for Education and Restoration, graduated from Albany State University, a Georgia HBCU.
A crowd of largely Black and Latino students, borrowers, advocates and politicians started to dissipate after an hours-long rally for loan forgiveness in front of the Supreme Court. Against a backdrop of Bob Marley music, activists had begun packing away their signs reading "Drop the Debt," "Student Debt Cancellation Is Legal," "Dreams Not Debt" and "C.L.E.A.R. My Student Loans."
C.L.E.A.R. stands for Cancel Loans for Education and Repartioand is a campaign by the New Georgia Project, the state's largest civic engagement group. Students and borrowers with the group arrived at the rally, which featured a slate of high-profile speakers, late, their overnight bus from Georgia having run into some hiccups along the way.
Maggie Bell, the group's lead organizer, said she wasn't fazed by the travel snafu nor the lukewarm prospects of a supportive ruling from the court. "We're going to see cancellation through now," she said, noting the group rallied for forgiveness outside the White House and U.S. Education Department last year. "We didn't start this not to see it finish." Bell, 24, attended Albany State University, a Georgia HBCU, with a Pell Grant and has roughly $40,000 in debt. Of that, $30,000 is in the form of federal loans, so Biden's proposal to erase $20,000 of her debt would be life-changing.
Such relief would be particularly vital for Black and Brown borrowers, Bell said. Black borrowers, for example, generally take on more student debt than their white counterparts. "We get sold on this idea of the American Dream, where you get your degree and then it's open access to your dream career, dream car, house, starting a family," she said. Loan forgiveness, she continued, could serve as a form of reparations for these communities.
- Alia Wong
Prelogar: If Biden could postpone student loan debt payments, he can cancel debt
U.S. Solicitor General Elizabeth Prelogar pushed back against the plaintiffs’ claims that Biden abused his power granted in the Heroes Act, likening the cancelation of student loan debt to postponing loan repayments, which was allowed under the same law.
“This is how secretaries across administrations have implemented the Heroes Act,” Prelogar said. She argued that to suggest Biden’s forgiveness of student loan debt “creates a brand-new program,” as argued by Nebraska and other states that sued the Biden administration, would “leave very little room for the Heroes Act to operate at all.” Prelogar added: “The fact that there are already statutory provisions for things like deferment and forbearance and discharge demonstrates that Congress could foresee that all of those are ways that you grant financial relief to student loan borrowers.”
- Joey Garrison
Many borrowers will still owe even if Biden plan allowed to go forward
Nebraska Solicitor General James Campbell stated that 20 million borrowers would be left without student loan balances if the debt forgiveness were approved. That matches figures the Biden administration has shared previously.
However, many borrowers would still have at least $20,000 in student loan debt if Biden’s plan were allowed to stand - even if they received the full $20,000 of relief. According to data from the Education Department, roughly 11.7 million borrowers owe more than $40,000.
- Chris Quintana
Amy Coney Barrett, liberal justices piling on over standing
Associate Justice Amy Coney Barrett speaks at the Ronald Reagan Presidential Library Foundation in Simi Valley, Calif., April 4, 2022.
Associate Justice Amy Coney Barrett is one of the first conservatives in this section of the argument to wade into whether the states have standing to sue. The states argue, in part, that a state-created entity known as MOHELA that services student loans would lose revenue under the plan. But MOHELA, a quasi-state agency in Missouri, didn’t actually bring the lawsuit. Missouri did.
A key question for the court is whether Missouri can sue on behalf of MOHELA.
Barrett, a Trump nominee who has twice before dismissed emergency cases the challenging loan plan, pressed the states on the point. “Do you want to address why MOHELA’s not here?” Barrett asked. “If MOHELA is an arm of the state, why didn't you just strong arm MOHELA” and tell them to pursue the case?
Campbell, who is representing the states, said that is “a question of state politics.”
Barrett’s comments came after the court’s liberal wing also pressed hard on whether the six conservative states that have sued over Biden’s student loan forgiveness program have standing to sue. If the court decides the states were not actually harmed by the plan, then Biden could win the case on a procedural point.
- John Fritze
Next up in SCOTUS oral arguments: Nebraska’s James Campbell
More than an hour into the Supreme Court’s oral arguments over Biden’s student loan forgiveness plan, the states who are suing over the $400 billion proposal now get their say. The states are being represented by Nebraska Solicitor General James Campbell.
Campbell is likely to face a series of difficult questions from the court’s liberal wing - and perhaps some of its conservatives as well - over whether the plaintiffs in the cases were actually harmed by Biden’s plan. If the answer to the question is "no" for all the plaintiffs, Biden would eke out a narrow win.
A key signal to watch in this portion of the argument: How much the court’s conservatives jump into the fray over standing. “The secretary is attempting to bypass Congress on one of today’s most debated policy questions,” Campbell told the court.
- John Fritze
What is the major questions doctrine?
Conservative legal thinkers have been pushing for years to curb the "administrative state," arguing that federal agencies should have less power to act unless there's clear congressional approval. The Supreme Court has been bolstering that effort by relying on something called the "major questions doctrine" to decide high-profile cases.
Under that doctrine, courts can invalidate regulations that have a major effect on the economy, are a matter of great "political significance" and are not explicitly authorized in the law - though no one is entirely sure how to define those terms. The Biden administration says the doctrine doesn't even apply in the student loan case because the law, they say, is clear on its own. The plaintiffs disagree.
The same doctrine was used in 2021 to prevent Biden from extending an eviction moratorium tied to the COVID-19 pandemic. The Supreme Court struck down the moratorium, ruling Congress couldn't have contemplated the law leading to a halt of evictions.
- John Fritze
Brett Kavanaugh: Student loan forgiveness program ‘seems problematic’ under precedent
Associate Justice Brett Kavanaugh, speaking for the first time during the Supreme Court oral arguments, pressed the Biden administration on why the student loan program shouldn’t suffer the same fate as other executive actions the court has struck down.
Congress, Kavanaugh said, “could have…referred to loan cancellation” in the law, but it didn’t. Instead, Kavanaugh said, the administration relied on “general language” in an “old statute” to create a “massive new program.”
“That seems problematic,” under Supreme Court precedent, Kavanaugh said. “Why does this case not fit into that formula that we’ve seen before?” Long considered at the center of the court - and occasionally a gettable vote for the court’s liberal wing - Kavanaugh is always an important justice to watch in the arguments. He can also be sometimes hard to read, asking tough questions of both sides.
- John Fritze
What is the HEROES Act?
Many of the justices are probing the power associated with the HEROES Act of 2003. The statute was enacted after 9/11. That law, the administration argues, gives the education secretary the ability to “waive” or “modify” student loans during a national emergency. That, in turn, would give the administration the ability to discharge debt en masse due to the pandemic.
The states argue the law does not give the secretary the ability to erase debt.
The HEROES Act has also been used as the justification for the ongoing pause on federal student loan payments. Those obligations were first paused in March 2020 under former President Donald Trump's administration at the onset of the pandemic. Both administrations extended the moratorium - which included setting interest rates on federal student loans at zero percent - multiple times. That pause could last through August depending on when the court issues its opinion deciding the two cases challenging the debt forgiveness plan.
- Chris Quintana
John Roberts drills Biden administration over separation of powers
In a troubling sign for the prospects of Biden’s student loan program, Chief Justice John Roberts smacked down the central premise of the administration's legal argument: that the president had the authority to act unilaterally to wipe out student loan debt without Congress. "We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Roberts said.
Roberts said the student loan case reminded him of a case in 2020 in which the Supreme Court, in a 5-4 decision, blocked unilateral action by former President Donald Trump to dismantle the Obama-era DREAMers program for undocumented immigrants. “This is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that significance,” he said.
- Joey Garrison
How much federal student loan debt is there?
People rally in support of the Biden administration's student debt relief plan in front of the the Supreme Court on February 28, 2023, in Washington, D.C.
According to the Education Department's most recent figures from the fourth quarter of 2022, there are 43.5 million federal student loan borrowers who hold about $1.63 trillion in debt. That figure has steadily grown in recent years, and is more than double the $516 billion owed by 28.3 million borrowers in 2007.
The Biden administration has estimated that roughly 40 million borrowers are eligible for itsmass forgiveness program.
- Chris Quintana
Freshman year, and already deep in debt
Justice Stanton, left, and Antwan McPherson, both 19 and freshmen at North Carolina A&T, stand outside the Supreme Court Tuesday, hoping that President Joe Biden's student loan debt forgiveness plan isn't permanently blocked.
Antwan McPherson and Justice Stanton, both 19, came to Washington from North Carolina for the day to rally for student debt forgiveness - even though it won't apply to them.
The two students at North Carolina A&T are still freshmen and have already accumulated thousands in debt. "I've come to understand early how much debt I'll have if I continue on," said McPherson, who's from Chicago and chose to attend the North Carolina school because it was a relatively inexpensive Historically Black College and University (HBCU).
Even if he gets a minimum wage job after college, he said, he wouldn't be able to pay off what he owes. "Say you make a certain amount in a year, you really don't make that amount because you're paying it back," he said. "So you work hard just to pay it back." McPherson said he's "not too optimistic" about the prospects of Biden's debt cancellation plan given the conservative leanings of the high court.
Stanton, however, is more hopeful "that our efforts aren't going to waste."
"I don't think it's fair that as students, most of us being so young, that we have such a burden of paying all these debts and we barely have our lives figured out," Stanton said. Debt "could limit me in terms of whether I want a house in the future, my career, if I wanted to open a business," Stanton continued. "It all would be way harder if I have to pay back money just for an education that should be free."
- Alia Wong
What is MOHELA?
The Justices have gone back and forth over the role of the Higher Education Loan Authority of the State of Missouri, or, as it’s better known, MOHELA. It's a quasi-state agency in Missouri that services federal loans nationally.
The Justices asked if MOHELA suffering financial losses as a result of the debt forgiveness program would be enough for Missouri to bring a case against the federal government. MOHELA has previously stated it did not have a role in Missouri’s litigation.
MOHELA is also the servicer that manages the federal government’s Public Service Loan Forgiveness Program, an initiative meant to erase the debt of those working in the public sector.
- Chris Quintana
Elizabeth Prelogar: Who is the Biden administration's attorney?
The Biden administration is being represented by U.S. Solicitor General Elizabeth Prelogar, who has been serving in the position since 2021. Sometimes referred to as the "10th justice," the solicitor general leads a team of lawyers who argue before the Supreme Court on behalf of the federal government and decide whether to appeal lower court rulings when the government is a party to a lawsuit.
Prelogar, a former Fulbright fellow and Harvard Law School graduate, clerked for Attorney General Merrick Garland, then a judge on the U.S. Court of Appeals for the District of Columbia Circuit. She also clerked for two Supreme Court associate justices, Ruth Bader Ginsburg and Elena Kagan.
- John Fritze
Early questions from conservatives signal opposition to Biden
Three members of the Supreme Court’s conservative wing - Chief Justice John Roberts, and Associate Justices Clarence Thomas and Samuel Alito - have focused heavily on whether the Biden administration had the authority to execute its student loan forgiveness plan. It’s very early in the arguments - a lot can shift over the course of the next several hours - but it’s not a great sign for Biden that there’s so much focus on the merits of the case rather than a debate about whether the correct plaintiffs filed suit in the case.
Alito zeroed in on an argument Biden has been making: That the court’s difficult-to-meet standard for when a president can act alone shouldn’t apply. The administration had asserted that the standard had previously been used to assess regulations, not benefit programs. “Drawing a distinction between benefits programs and other programs seems to presume that when it comes to the administration of benefits programs, a trillion dollars here, trillion dollars there, doesn't really make that much difference to Congress," Alito said.
- John Fritze
Justices question 'half a trillion' cost of Biden’s actions
Justices pressed the Biden administration's lawyer on the projected $400 billion cost of Biden’s action to forgive student loan debt, suggesting such a move goes beyond the 2003 Heroes Act that allows the president to “waive or modify” loan provisions. “Congress shouldn't have been surprised when half a trillion dollars is wiped off the books?” Chief Justice John Roberts said.
Associate Justice Sonia Sotomayor, one of the three liberal justices, echoed Roberts’ questioning: “How do you deal with? That seems to favor the argument that this a major challenge,” Sotomayor said.
U.S. Solicitor General Elizabeth Prelogar said canceling student loan debt is not based on regulatory authority but “the administration of a benefits program.”
“It’s perfectly logical for Congress to broadly empower the executive to provide benefits, especially in a crisis situation or an emergency like we've seen with COVID-19,” she said.
- Joey Garrison
Clarence Thomas, John Roberts use first questions to question Biden’s power
Associate Justice Clarence Thomas started off the arguments Tuesday questioning under what authority the administration seeks to cancel student loans. The law Biden relied on gives the administration power to “waive or modify” loan provisions.
Is what Biden did a “waiver or a modification,” Thomas pressed. There’s no explicit provision in the law that allows the loans to be “cancelled,” Thomas pointed out. Chief Justice John Roberts picked up that same argument. “We’re talking about half a trillion dollars and 43 million Americans,” Roberts said. “How does that fit under the normal definition of modify?”
- John Fritze
Supreme Court arguments underway in Biden student loan forgiveness plan
The Supreme Court’s arguments over President Joe Biden's student loan program got underway a little after 10:10 a.m. ES.T Representing the Biden administration, and starting off the arguments, is Solicitor General Elizabeth Prelogar. Prelogar told the court that without the plan, “defaults and delinquencies will surge.” Congress “expressly authorized” the loan forgiveness during emergencies, she said.
- John Fritze
Ketani Brown Jackson hands down first merits opinion
Associate Justice Ketanji Brown Jackson stands as she and members of the Supreme Court pose for a group portrait following at the Supreme Court in Washington, D.C., Oct. 7, 2022.
Associate Justice Ketanji Brown Jackson handed down her first merits opinion Tuesday in a battle between states over who gets the proceeds of abandoned money orders. Jackson wrote for a unanimous court that as a general matter the proceeds should go to the state where the product was purchased. By tradition, the court tries to assign the least senior justice an opinion that is unanimous.
- John Fritze
Affirmative action: What Justice Jackson's recusal from Harvard case means for Black students
Hundreds gather outside Supreme Court for student loan forgiveness debate
Eliana Reed, 26, stands outside the Supreme Court as justices heard arguments about President Joe Biden's student loan debt forgiveness plan.
Hundreds of protesters gathered outside the Supreme Court on Tuesday ahead of the arguments about Biden's student loan forgiveness program - most of whom appeared to support the plan. Some carried signs that read "Cancel Student Debt." Others proclaimed that "Student debt cancellation is illegal." They chanted phrases throughout, such as "D-E-B-T, student debt is crushing me!" and "Education is a right!" The turnout appeared to be the largest since the high court held arguments last year in the blockbuster affirmative action cases.
Eliana Reed, 26, said efforts to preserve Biden's debt relief program are a "no brainer." That millions of Americans are subject to insurmountable debt they're unable to pay off with their jobs "feels so obviously wrong," said Reed, who has about $17,000 in student debt left.
The issue "taps into so many different groups of people."
- John Fritze and Alia Wong
Supreme Court denied student loan challenges before
Before the Supreme Court scheduled arguments in Tuesday’s student loan cases, it had twice before balked at lawsuits challenging the program.
Associate Justice Amy Coney Barrett in November denied a challenge to the loan forgiveness program from a conservative legal group on behalf of two people entitled to "automatic" cancellation of their debt. The plaintiffs claimed that the automatic cancellation would create "excess tax liability under state law." A month earlier, the court batted away a lawsuit from a Wisconsin taxpayer group.
The reason there are so many lawsuits is that groups opposed to the program have been attempting to find a plaintiff who has standing - in other words, who can demonstrate they are injured by the effort in a way that allows them to challenge it in federal court. Whether the current plaintiffs have standing will be a central part of the argument Tuesday as well.
- John Fritze
Biden: 'I have your back' on student loans
Biden addressed the student loan litigation briefly during remarks Monday night. “My administration is making our case to the Supreme Court, and I’m confident the legal authority to carry out that plan is there,” the president said at a White House ceremony celebrating Black History Month. “I promise you. I have your back.”
- Joey Garrison
Plaintiffs: 'There is a student loan crisis'
New graduates line up before the start of a community college commencement in East Rutherford, N.J., on May 17, 2018.
The plaintiffs challenging Biden's student loan forgiveness plan acknowledge that the current student loan system isn't working. They just don't think Biden's plan will fix it. "There is a student loan crisis in this country," Karen Harned, chief legal officer for the Job Creators Network Foundation, said on a call with reporters Monday. "But this crisis cannot and will not be solved by the president creating a $400 billion program behind closed doors without any input from Congress or the American people."
Questions: Is Biden's student debt forgiveness plan dead?
Rough ride ahead: Biden will be playing defense on student loans at Supreme Court
The group is representing two borrowers: One who didn't qualify for forgiveness because her loans are held by a private, commercial entity and another who didn't qualify for the maximum possible relief because he wasn't a Pell Grant recipient. Biden's proposal would wipe away $20,000 worth of debt for borrowers who also used a Pell Grant to pay tuition. Pell Grants are awarded to students from low-income families. He also wants to erase $10,000 in debt for most other borrowers.
- John Fritze
Plan B on student loan forgiveness? White House won't say.
With many experts predicting President Joe Biden is in for a rough argument Tuesday over his $400 billion student loan forgiveness plan, a natural question has come up repeatedly in recent days: Is there a Plan B if the administration's effort is ultimately struck down?
Give points to White House press secretary Karine Jean-Pierre for answering the question consistently: "We are very much confident in our legal authority here," Jean-Pierre told reporters Monday - echoing the answer she gave to the same question Friday. "That's why our Justice Department has taken it all the way to the Supreme Court."
Translation: If there is a backup plan, the administration isn't ready to talk about it. That's not a surprise, though. A major element of the litigation is whether the administration used the right law to set up the loan forgiveness program. Acknowledging the administration is combing through federal statutes looking for some other way to authorize the program would give ammunition to the plaintiffs on the eve of the arguments.
- John Fritze and Joey Garrison
Justice Thomas wrote of 'crushing weight' of student loans
The Supreme Court won't have far to look if it wants a personal take on the "crushing weight" of student debt that underlies the Biden administration’s college loan forgiveness plan. Associate Justice Clarence Thomas was in his mid-40s and in his third year on the nation's highest court when he paid off the last of his debt from his time at Yale Law School.
Thomas, the court's longest-serving justice and staunchest conservative, has been skeptical of other Biden administration initiatives. And when the Supreme Court hears arguments Tuesday involving President Joe Biden’s debt relief plan that would wipe away up to $20,000 in outstanding student loans, Thomas is not likely to be a vote in the administration’s favor.
--Plan B: Millions of borrowers have had billions in student loan debt erased, and there's more to come.
But the justices' own experiences can be relevant to how they approach a case, and alone among them, Thomas has written about the role student loans played in his financial struggles.
A fellow law school student even suggested Thomas declare bankruptcy after graduating “to get out from under the crushing weight of all my student loans,” the justice wrote in his best-selling 2007 memoir, “My Grandfather’s Son.” He rejected the idea.
- Associated Press
What's in Biden's student loan forgiveness plan?
Biden proposed wiping away $20,000 worth of debt for borrowers who also used a Pell Grant to pay tuition. Pell Grants are awarded to students from low-income families. The president also wants to erase $10,000 in debt for most other borrowers.
Only borrowers with an income less than $125,000, or $250,000 for married couples, would be able to have any debt forgiven.
About 26 million people applied for relief before lawsuits stopped the entire program in its tracks. And of those, 16 million were approved to have a portion, or depending on their balance, all their debt erased. For now, applications are closed.
- Nirvi Shah and Chris Quintana
https://news.yahoo.com/supreme-court-debate-bidens-student-080010139.html?.tsrc=1026
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Millions of student-loan borrowers will experience 'devastating' delays in debt relief if a GOP proposal to cut spending goes through, Biden's Education Secretary says
Ayelet Sheffey
Mon, March 20, 2023 at 11:36 PM GMT+9·
President Joe Biden and Education Secretary Miguel Cardona
U.S. President Joe Biden, joined by Education Secretary Miguel Cardona, speaks on student loan debt in the Roosevelt Room of the White House August 24, 2022 in Washington,
Rep. Rosa DeLauro asked all federal agency heads how GOP spending cut proposals would impact them. The agencies responded on Monday, with Education Sec. Miguel Cardona outlining the "devastating" impact the cuts would have on student-loan borrowers. He said the cuts would delay student-debt relief and make it even harder to get customer service help. Federal agencies are responding to a Republican plan to cut spending levels - and its impacts don't look pretty.
In January, House Appropriations Committee Ranking Member Rosa DeLauro wrote to all federal agency heads asking how a Republican plan to cap fiscal year 2024 spending at the 2022 level would impact their agencies and the Americans they serve.
On Monday, the agencies responded. House Appropriations Committee Ranking Member Rosa DeLauro said in a statement that Republican proposals to cut spending on federal programs would "cause irreparable damage to our communities by gutting the programs every single American relies on. Those proposals are unrealistic, unsustainable, and unconscionable."
"Continued Republican calls for cuts of this magnitude-both secret proposals from Republican leadership and public demands from extremists in the party-would be absolutely detrimental to all Americans, many of whom have not seen a pay raise in years and are struggling to pay their bills," DeLauro added. "The math is not there. These drastic cuts would put people at risk."
Education Secretary Miguel Cardona, in his response, elaborated on the "devastating effects" the GOP proposal would have on students and parents who rely on financial aid - especially student-loan borrowers. He noted that while specifics of the Republican plan have yet to be publicly released, the Education Department analyzed the impacts of capping programs at the fiscal year 2022 level, and 22% below the currently enacted level for fiscal year 2023.
Cardona said the impacts of the decreased spending would be significant when it comes to administering financial aid. A 22% spending reduction would cut $468 million to service financial aid, and if funding were kept at the 2022 level, "more than 40 million student loan borrowers would be impacted through decreased service hours and longer turnaround times to make changes to student loan repayment plans, or obtain a deferment, forbearance, or discharge of student loans."
He added that 17.6 million parents and students who apply for financial aid could experience "multiple-hour wait times and reduced call center hours," and applications for loans could take "weeks longer to process."
Student-loan borrowers are already faced with hours-long wait times to get simple questions answered from the companies that service their loans. With Biden's broad plan to cancel student debt stalled as the Supreme Court makes a final decision on the legality of the relief, borrowers have had questions on what the relief means for their repayment.
One borrower, for example, recently told Insider that "no one is taking the time to help me or to listen to me," causing her to spend hours emailing and calling federal agencies to get help with repayment.
Still, Democrats are waiting for a concrete plan from the opposing party on what type of spending cuts they want to see in a potential deal to raise the debt ceiling and keep the US on top of paying its bills, so it's unclear how exactly the Education Department will be impacted by any forthcoming cuts.
But the agency already has a lot on its plate with minimal resources, given Congress approved a budget last year that did not increase Federal Student Aid's funding. Biden's recently released budget requested a funding increase for the agency to help facilitate a smooth transition to repayment for borrowers this year, but it's not likely to be approved by a GOP-led House.
https://news.yahoo.com/millions-student-loan-borrowers-experience-143600933.html
Ann Carrns
Sat, March 18, 2023 at 11:15 PM GMT+9
The plan aims to fix “historical failures” and will provide debt cancellation to thousands of borrowers, according to the Education Department.
It’s unclear whether President Joe Biden’s student loan cancellation plan will survive a legal challenge now before the Supreme Court, but a different federal program may still offer relief to many borrowers. Some are already seeing relief under the program, and the government just extended a key deadline for some borrowers who must take special steps to qualify.
The help will come as a one-time adjustment to accounts of borrowers, some of whom have been making payments for decades. The adjustment will revise their accounts so that more of their payments will count toward the required number of payments needed to qualify for loan forgiveness.
The adjustment may benefit millions of borrowers, eliminating outstanding balances for some and moving many others closer to forgiveness of their remaining debt, the Education Department said when it announced the plan almost a year ago.
Some background: Income-driven repayment plans let student loan borrowers make lower monthly payments - in some cases, as low as zero dollars - based on their income and family size. Because the payments are low, they don’t often make much of a dent in the loan balance. But after making payments for 240 or 300 months (20 or 25 years), depending on the specific plan, the remaining debt is eligible for cancellation.
Now, under the new program, borrower accounts will be reviewed and updated, and credit will be given for months that didn’t previously count toward the maximum repayment period - such as certain periods of forbearance or deferment, when borrowers pause payments because of financial setbacks. (Periods when a loan was in default won’t count.)
Based on the adjustment, some borrowers who have reached the necessary threshold have already been notified that their loans have been discharged, an Education Department spokesperson said on Thursday in an email. More than 3.6 million borrowers will receive at least three years of credit toward forgiveness, the Federal Student Aid office has said.
The adjustment will apply even to borrowers who were not enrolled in income-driven plans, in recognition that many were not made aware of their options or were improperly steered away by their loan servicers, the Education Department said. In addition to correcting “historic inaccuracies,” the department said, it will create a new payment-counting process to avoid future problems. An online tracker is expected to be available this year.
The one-time revision will apply to all federally held student loans, including Plus loans, which are available to graduate students and to parents, to help them pay for their children’s college education.
Most account adjustments will happen automatically, according to the Education Department, but there are some exceptions. Older commercially held loans, such as Perkins loans and some made under the Federal Family Education Loan Program, can qualify for the one-time adjustment, but borrowers must first apply to consolidate them into a new direct federal loan. These borrowers can now apply for a consolidation loan until the end of the year, the department spokesperson said; previously, the deadline was May 1.
Borrowers with one-time payment adjustments that make them eligible for automatic loan forgiveness through the Public Service Loan Forgiveness program are being notified first, the spokesperson said. After adjusting those accounts, the department expects to next adjust accounts for borrowers eligible for forgiveness under income-driven repayment rules. The federal aid office has said that adjustments will occur this summer.
“Borrowers eligible for forgiveness will continue to receive discharges as they reach the required months of payments,” he said, “and will not be put back into repayment.”
Ashley Harrington, a senior adviser in the Federal Student Aid office, asked borrowers to be patient, and she suggested checking the government’s income-driven repayment website for news. (The site doesn’t necessarily flag updates, so borrowers should read carefully.) Harrington made her remarks on March 7 during a webinar hosted by Betsy Mayotte, the founder of the Institute of Student Loan Advisors, a nonprofit group that provides student loan advice.
The recent avalanche of student-loan-relief proposals, while welcome, have been difficult for people to keep track of, Mayotte said, adding, “It really has caused a lot of confusion among borrowers.”
Here are some questions and answers about the income-driven payment adjustment:
If the U.S. Supreme Court strikes down Biden’s loan-cancellation program, will the income-driven adjustment program continue?
Yes, according to student loan advisers; the programs are separate. The plan being reviewed by the Supreme Court would cancel as much as $20,000 in student debt for qualifying borrowers. If the justices reject that plan, the loan adjustment plan will remain available, Mayotte said. And if the court lets the president’s cancellation plan proceed, she said, borrowers may potentially benefit from both programs.
Is there a new income-driven repayment plan coming?
Yes. The Biden administration has proposed a new, more generous plan to replace the current income-driven plans, to simplify things for borrowers. The administration has said that it is aiming to start making some parts of the new plan available this year.
If I consolidate my loans to get the adjustment, won’t the clock for loan forgiveness reset?
No. Normally, a risk to consolidating student loans is that the forgiveness clock resets to zero, and borrowers must start over to accumulate credit toward cancellation of their balance. But that won’t happen under the adjustment plan, Harrington said during the webinar.
There are other important factors to consider, however, before consolidating. For instance, the interest rate on your new loan may be different, and your monthly payment may change.
Also, importantly, borrowers who consolidate federally held loans with loans that aren’t federally held in order to qualify for the adjustment may lose their eligibility for the one-time debt relief plan that is being considered by the Supreme Court, said Abby Shafroth, a lawyer with the National Consumer Law Center and an expert on federal student loans.
Borrowers who have only loans that aren’t federally held should “strongly consider” consolidating into a new federal loan before the deadline for the one-time adjustment, she said, as they’re not eligible for the $20,000 debt relief plan anyway.
For a smaller group of borrowers who have both types of loans (federally and commercially held), the decision is more complex. One approach, Shafroth suggested, might be to leave their federally held loans alone and consolidate only their commercially held loans into a new federal consolidation loan. With the consolidation deadline now extended, borrowers have more time to weigh their options and perhaps consider the impact of the Supreme Court decision, which is expected in the coming months.
How can I tell whether my loans potentially qualify for the special adjustment?
One way to tell, Shafroth said, is by confirming whether your loan payments have been suspended under the COVID-related pause that began in March 2020. If they were, your loans most likely qualify. If you are still being billed by your loan servicer, your loans are not federally held and you may need to apply for a consolidation loan.
Will the adjusted loan payments also count toward the Public Service Loan Forgiveness program?
Yes. Many borrowers submitted applications in the fall for a temporary waiver under the public service program, which forgives student debt after 10 years of repayment for borrowers working in government or nonprofit jobs. But if they missed that window to get payments that normally wouldn’t qualify toward forgiveness included, they might benefit from the income-driven adjustment, Mayotte said, as long as the borrowers were working in a qualifying job at the time of those payments.
c.2023 The New York Times Company
https://news.yahoo.com/federal-student-loan-program-move-141541488.html
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Supreme Court's conservative justices signal skepticism of Biden's loan forgiveness plan
John Fritze, Chris Quintana, Joey Garrison, Alia Wong and Nirvi Shah, USA TODAY
March 1, 2023·
WASHINGTON - The Supreme Court's conservative wing signaled deep skepticism Tuesday over President Joe Biden's plan to wipe away $400 billion in student loan debt, suggesting the administration may have overstepped its authority by creating a program estimated to benefit more than 40 million borrowers.
Over the course of several hours, a majority of the justices repeatedly turned to questions about the law Biden relied on to create the program - and whether the law gave him that power. The court will not issue its decision in the two cases until later this year and the position justices signal at arguments don't always predict the outcome of the case.
Six conservative states and two borrowers sued over the program and there has been considerable debate, heading into the arguments, over whether they were the right parties to sue. But that issue largely took a backseat to broader questions about Biden's authority.
"We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Cheif Justice John Roberts said. “This is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that significance."
Here's a look at what's happening at the Supreme Court.
Biden administration appeals to ‘high stakes’ as SCOTUS oral arguments conclude
The Supreme Court concluded oral arguments in the student loan debt forgiveness cases after three and half hours with Biden’s lawyer citing “the high stakes" in her closing remarks.
Pivoting from the legal arguments, U.S. Solicitor General Elizabeth Prelogar made an emotional appeal about the “tens of millions of student loan borrowers in this country” who were devastated financially by the COVID-19 pandemic. She said they will be hurt even more financially after Biden’s freeze on student loan repayments ends.
Ninety percent of the borrowers covered by Biden’s plan make $75,000 or less, she said. Twenty-six million Americans have applied for debt forgiveness and 16 million have been approved.
“For those Americans, this is a critical lifeline to ensure that they are not subject to the severe negative consequences of delinquency and default on student loan debt,” Prelogar said. “And the relief for these Americans has been held up by two student loan borrowers who don't even have standing and whose claims fail on the merits.”
- Joey Garrison
What is the Federal Family Education Loan Program? And what does it have to do with the mass forgiveness plan?
Myra Brown, one of the plaintiffs in the suit backed by the Job Creators Network Foundation, holds debt issued through the Federal Family Education Loan program.
This is a specific type of student loan backed by the federal government but held by private entities. The program has since been discontinued as the government now directly issues student loans. But many people still carry debt in the form of a FFEL loan.
Borrowers in the FFEL program were cut out of the administration’s mass debt forgiveness plan. When the plan was first announced, they had been able to consolidate their debts into a loan owned directly by the federal government. That transfer would then allow borrowers to access the debt relief program. But by Sept. 29, 2022, the administration barred FFEL borrowers from relief even through consolidation. That move followed one of the many lawsuits filed to challenge Biden's mass debt forgiveness plan.
MOHELA, the quasi-state agency based in Missouri, oversees these FFEL loans in addition to direct loans. The justices have debated what role the loan servicer should play in the litigation.
- Chris Quintana and Nirvi Shah
Elena Kagan, Ketanji Brown Jackson lean toward Biden plan on fairness concerns
Associate Justice Elena Kagan participates in a panel discussion with Hari Osofsky, dean of the Northwestern University Pritzker School of Law, in the Law School's Thorne Auditorium on Sept. 14, 2022.
Two of the high court's liberal justices, appearing to side with the Biden administration, pushed back at criticism from some of the conservative justices that the Biden student loan debt forgiveness program is unfair.
"Congress passed a statute that dealt with loan repayment for colleges, and it didn't pass a statute that dealt with loan repayment for lawn businesses,” Associate Justice Elena Kagan said. “And so, Congress made a choice and that may have been the right choice or it may have been the wrong choice, but that's Congress's choice."
Associate Justice Ketanji Brown Jackson also questioned the fairness argument. “I just don't know how far we can go with this notion of, to the extent that the government is providing much-needed assistance to people in an emergency, it's going to be unfair to those who don't get the same benefit.”
- Joey Garrison
How much would the student loan forgiveness plan cost?
Estimates for the overall cost of the program vary, but the Congressional Budget Office estimated the plan would cost about $400 billion. The agency, however, said its estimate was “highly uncertain.” The Committee for a Responsible Federal, a nonprofit, put the cost of the forgiveness plan at about $360 billion.
- Chris Quintana
More: Biden's student loan forgiveness will cost US about $400 billion, CBO estimates
John Roberts, Samuel Alito raise concerns about 'fairness' with Biden's plan
Chief Justice John Roberts raised what he called “the fairness argument,” echoing a common criticism from opponents of President Biden’s student loan program who argue it punishes Americans who couldn’t afford college or worked hard to pay off their loans.
Roberts introduced a hypothetical situation of two high school graduates, neither of whom could afford college. One took out a loan to attend. The other started a lawn care business with help from a bank loan instead of going to college. “At the end of four years, we know statistically, that the person with the college degree is going to do significantly financially better over the course of life than the person without,” Roberts said. “And then along comes the government and tells that person, you don't have to pay your loan.”
Roberts said the person who started a lawn care service still had to pay off their business loans “even though his tax dollars are going to support the forgiveness of the loan for the college graduate who is going to make a lot more than him over the course of his lifetime.”
Associate Justice Samuel Alito echoed those concerns. “I think it's a fair question to say, what is your client’s view about the fairness question that some people have posed, and that was really reiterated for you by the chief justice?
U.S. Solicitor Genreal Elizabeth Prelogar responded by saying that Congress, by passing the HEROES Act, has made the judgment that the education secretary can provide student loan relief during emergencies like the COVID-19 pandemic. “You can make this critique of every prior exercise of HEROES Act authority,” she said.
- Joey Garrison
John Roberts: 'More than half the people' don't need help on student loans
Chief Justice John Roberts pressed the Biden administration on its own findings that more than half of borrowers predicted they would be able to repay their loans - and suggested, given that, Congress should be the entity that decided how to structure the program. "If more than half the people say they don't need this relief, extending relief to that breadth certainly raises questions," Roberts argued.
Elizabeth Prelogar, the Biden administration's attorney, countered that in some higher income brackets that might be the case but not so much for Americans making less money.
- John Fritze and Joey Garrison
Crowd outside Supreme Court thins, though feelings on loan forgiveness remain strong
Maggie Bell, 24 and the organizer of a group called Cancel Loans for Education and Restoration, graduated from Albany State University, a Georgia HBCU.
A crowd of largely Black and Latino students, borrowers, advocates and politicians started to dissipate after an hours-long rally for loan forgiveness in front of the Supreme Court. Against a backdrop of Bob Marley music, activists had begun packing away their signs reading "Drop the Debt," "Student Debt Cancellation Is Legal," "Dreams Not Debt" and "C.L.E.A.R. My Student Loans."
C.L.E.A.R. stands for Cancel Loans for Education and Repartioand is a campaign by the New Georgia Project, the state's largest civic engagement group. Students and borrowers with the group arrived at the rally, which featured a slate of high-profile speakers, late, their overnight bus from Georgia having run into some hiccups along the way.
Maggie Bell, the group's lead organizer, said she wasn't fazed by the travel snafu nor the lukewarm prospects of a supportive ruling from the court. "We're going to see cancellation through now," she said, noting the group rallied for forgiveness outside the White House and U.S. Education Department last year. "We didn't start this not to see it finish." Bell, 24, attended Albany State University, a Georgia HBCU, with a Pell Grant and has roughly $40,000 in debt. Of that, $30,000 is in the form of federal loans, so Biden's proposal to erase $20,000 of her debt would be life-changing.
Such relief would be particularly vital for Black and Brown borrowers, Bell said. Black borrowers, for example, generally take on more student debt than their white counterparts. "We get sold on this idea of the American Dream, where you get your degree and then it's open access to your dream career, dream car, house, starting a family," she said. Loan forgiveness, she continued, could serve as a form of reparations for these communities.
- Alia Wong
Prelogar: If Biden could postpone student loan debt payments, he can cancel debt
U.S. Solicitor General Elizabeth Prelogar pushed back against the plaintiffs’ claims that Biden abused his power granted in the Heroes Act, likening the cancelation of student loan debt to postponing loan repayments, which was allowed under the same law.
“This is how secretaries across administrations have implemented the Heroes Act,” Prelogar said. She argued that to suggest Biden’s forgiveness of student loan debt “creates a brand-new program,” as argued by Nebraska and other states that sued the Biden administration, would “leave very little room for the Heroes Act to operate at all.” Prelogar added: “The fact that there are already statutory provisions for things like deferment and forbearance and discharge demonstrates that Congress could foresee that all of those are ways that you grant financial relief to student loan borrowers.”
- Joey Garrison
Many borrowers will still owe even if Biden plan allowed to go forward
Nebraska Solicitor General James Campbell stated that 20 million borrowers would be left without student loan balances if the debt forgiveness were approved. That matches figures the Biden administration has shared previously.
However, many borrowers would still have at least $20,000 in student loan debt if Biden’s plan were allowed to stand - even if they received the full $20,000 of relief. According to data from the Education Department, roughly 11.7 million borrowers owe more than $40,000.
- Chris Quintana
Amy Coney Barrett, liberal justices piling on over standing
Associate Justice Amy Coney Barrett speaks at the Ronald Reagan Presidential Library Foundation in Simi Valley, Calif., April 4, 2022.
Associate Justice Amy Coney Barrett is one of the first conservatives in this section of the argument to wade into whether the states have standing to sue. The states argue, in part, that a state-created entity known as MOHELA that services student loans would lose revenue under the plan. But MOHELA, a quasi-state agency in Missouri, didn’t actually bring the lawsuit. Missouri did.
A key question for the court is whether Missouri can sue on behalf of MOHELA.
Barrett, a Trump nominee who has twice before dismissed emergency cases the challenging loan plan, pressed the states on the point. “Do you want to address why MOHELA’s not here?” Barrett asked. “If MOHELA is an arm of the state, why didn't you just strong arm MOHELA” and tell them to pursue the case?
Campbell, who is representing the states, said that is “a question of state politics.”
Barrett’s comments came after the court’s liberal wing also pressed hard on whether the six conservative states that have sued over Biden’s student loan forgiveness program have standing to sue. If the court decides the states were not actually harmed by the plan, then Biden could win the case on a procedural point.
- John Fritze
Next up in SCOTUS oral arguments: Nebraska’s James Campbell
More than an hour into the Supreme Court’s oral arguments over Biden’s student loan forgiveness plan, the states who are suing over the $400 billion proposal now get their say. The states are being represented by Nebraska Solicitor General James Campbell.
Campbell is likely to face a series of difficult questions from the court’s liberal wing - and perhaps some of its conservatives as well - over whether the plaintiffs in the cases were actually harmed by Biden’s plan. If the answer to the question is "no" for all the plaintiffs, Biden would eke out a narrow win.
A key signal to watch in this portion of the argument: How much the court’s conservatives jump into the fray over standing. “The secretary is attempting to bypass Congress on one of today’s most debated policy questions,” Campbell told the court.
- John Fritze
What is the major questions doctrine?
Conservative legal thinkers have been pushing for years to curb the "administrative state," arguing that federal agencies should have less power to act unless there's clear congressional approval. The Supreme Court has been bolstering that effort by relying on something called the "major questions doctrine" to decide high-profile cases.
Under that doctrine, courts can invalidate regulations that have a major effect on the economy, are a matter of great "political significance" and are not explicitly authorized in the law - though no one is entirely sure how to define those terms. The Biden administration says the doctrine doesn't even apply in the student loan case because the law, they say, is clear on its own. The plaintiffs disagree.
The same doctrine was used in 2021 to prevent Biden from extending an eviction moratorium tied to the COVID-19 pandemic. The Supreme Court struck down the moratorium, ruling Congress couldn't have contemplated the law leading to a halt of evictions.
- John Fritze
Brett Kavanaugh: Student loan forgiveness program ‘seems problematic’ under precedent
Associate Justice Brett Kavanaugh, speaking for the first time during the Supreme Court oral arguments, pressed the Biden administration on why the student loan program shouldn’t suffer the same fate as other executive actions the court has struck down.
Congress, Kavanaugh said, “could have…referred to loan cancellation” in the law, but it didn’t. Instead, Kavanaugh said, the administration relied on “general language” in an “old statute” to create a “massive new program.”
“That seems problematic,” under Supreme Court precedent, Kavanaugh said. “Why does this case not fit into that formula that we’ve seen before?” Long considered at the center of the court - and occasionally a gettable vote for the court’s liberal wing - Kavanaugh is always an important justice to watch in the arguments. He can also be sometimes hard to read, asking tough questions of both sides.
- John Fritze
What is the HEROES Act?
Many of the justices are probing the power associated with the HEROES Act of 2003. The statute was enacted after 9/11. That law, the administration argues, gives the education secretary the ability to “waive” or “modify” student loans during a national emergency. That, in turn, would give the administration the ability to discharge debt en masse due to the pandemic.
The states argue the law does not give the secretary the ability to erase debt.
The HEROES Act has also been used as the justification for the ongoing pause on federal student loan payments. Those obligations were first paused in March 2020 under former President Donald Trump's administration at the onset of the pandemic. Both administrations extended the moratorium - which included setting interest rates on federal student loans at zero percent - multiple times. That pause could last through August depending on when the court issues its opinion deciding the two cases challenging the debt forgiveness plan.
- Chris Quintana
John Roberts drills Biden administration over separation of powers
In a troubling sign for the prospects of Biden’s student loan program, Chief Justice John Roberts smacked down the central premise of the administration's legal argument: that the president had the authority to act unilaterally to wipe out student loan debt without Congress. "We take very seriously the idea of separation of powers and that power should be divided to prevent its abuse,” Roberts said.
Roberts said the student loan case reminded him of a case in 2020 in which the Supreme Court, in a 5-4 decision, blocked unilateral action by former President Donald Trump to dismantle the Obama-era DREAMers program for undocumented immigrants. “This is a case that presents extraordinarily serious, important issues about the role of Congress and about the role that we should exercise in scrutinizing that significance,” he said.
- Joey Garrison
How much federal student loan debt is there?
People rally in support of the Biden administration's student debt relief plan in front of the the Supreme Court on February 28, 2023, in Washington, D.C.
According to the Education Department's most recent figures from the fourth quarter of 2022, there are 43.5 million federal student loan borrowers who hold about $1.63 trillion in debt. That figure has steadily grown in recent years, and is more than double the $516 billion owed by 28.3 million borrowers in 2007.
The Biden administration has estimated that roughly 40 million borrowers are eligible for itsmass forgiveness program.
- Chris Quintana
Freshman year, and already deep in debt
Justice Stanton, left, and Antwan McPherson, both 19 and freshmen at North Carolina A&T, stand outside the Supreme Court Tuesday, hoping that President Joe Biden's student loan debt forgiveness plan isn't permanently blocked.
Antwan McPherson and Justice Stanton, both 19, came to Washington from North Carolina for the day to rally for student debt forgiveness - even though it won't apply to them.
The two students at North Carolina A&T are still freshmen and have already accumulated thousands in debt. "I've come to understand early how much debt I'll have if I continue on," said McPherson, who's from Chicago and chose to attend the North Carolina school because it was a relatively inexpensive Historically Black College and University (HBCU).
Even if he gets a minimum wage job after college, he said, he wouldn't be able to pay off what he owes. "Say you make a certain amount in a year, you really don't make that amount because you're paying it back," he said. "So you work hard just to pay it back." McPherson said he's "not too optimistic" about the prospects of Biden's debt cancellation plan given the conservative leanings of the high court.
Stanton, however, is more hopeful "that our efforts aren't going to waste."
"I don't think it's fair that as students, most of us being so young, that we have such a burden of paying all these debts and we barely have our lives figured out," Stanton said. Debt "could limit me in terms of whether I want a house in the future, my career, if I wanted to open a business," Stanton continued. "It all would be way harder if I have to pay back money just for an education that should be free."
- Alia Wong
What is MOHELA?
The Justices have gone back and forth over the role of the Higher Education Loan Authority of the State of Missouri, or, as it’s better known, MOHELA. It's a quasi-state agency in Missouri that services federal loans nationally.
The Justices asked if MOHELA suffering financial losses as a result of the debt forgiveness program would be enough for Missouri to bring a case against the federal government. MOHELA has previously stated it did not have a role in Missouri’s litigation.
MOHELA is also the servicer that manages the federal government’s Public Service Loan Forgiveness Program, an initiative meant to erase the debt of those working in the public sector.
- Chris Quintana
Elizabeth Prelogar: Who is the Biden administration's attorney?
The Biden administration is being represented by U.S. Solicitor General Elizabeth Prelogar, who has been serving in the position since 2021. Sometimes referred to as the "10th justice," the solicitor general leads a team of lawyers who argue before the Supreme Court on behalf of the federal government and decide whether to appeal lower court rulings when the government is a party to a lawsuit.
Prelogar, a former Fulbright fellow and Harvard Law School graduate, clerked for Attorney General Merrick Garland, then a judge on the U.S. Court of Appeals for the District of Columbia Circuit. She also clerked for two Supreme Court associate justices, Ruth Bader Ginsburg and Elena Kagan.
- John Fritze
Early questions from conservatives signal opposition to Biden
Three members of the Supreme Court’s conservative wing - Chief Justice John Roberts, and Associate Justices Clarence Thomas and Samuel Alito - have focused heavily on whether the Biden administration had the authority to execute its student loan forgiveness plan. It’s very early in the arguments - a lot can shift over the course of the next several hours - but it’s not a great sign for Biden that there’s so much focus on the merits of the case rather than a debate about whether the correct plaintiffs filed suit in the case.
Alito zeroed in on an argument Biden has been making: That the court’s difficult-to-meet standard for when a president can act alone shouldn’t apply. The administration had asserted that the standard had previously been used to assess regulations, not benefit programs. “Drawing a distinction between benefits programs and other programs seems to presume that when it comes to the administration of benefits programs, a trillion dollars here, trillion dollars there, doesn't really make that much difference to Congress," Alito said.
- John Fritze
Justices question 'half a trillion' cost of Biden’s actions
Justices pressed the Biden administration's lawyer on the projected $400 billion cost of Biden’s action to forgive student loan debt, suggesting such a move goes beyond the 2003 Heroes Act that allows the president to “waive or modify” loan provisions. “Congress shouldn't have been surprised when half a trillion dollars is wiped off the books?” Chief Justice John Roberts said.
Associate Justice Sonia Sotomayor, one of the three liberal justices, echoed Roberts’ questioning: “How do you deal with? That seems to favor the argument that this a major challenge,” Sotomayor said.
U.S. Solicitor General Elizabeth Prelogar said canceling student loan debt is not based on regulatory authority but “the administration of a benefits program.”
“It’s perfectly logical for Congress to broadly empower the executive to provide benefits, especially in a crisis situation or an emergency like we've seen with COVID-19,” she said.
- Joey Garrison
Clarence Thomas, John Roberts use first questions to question Biden’s power
Associate Justice Clarence Thomas started off the arguments Tuesday questioning under what authority the administration seeks to cancel student loans. The law Biden relied on gives the administration power to “waive or modify” loan provisions.
Is what Biden did a “waiver or a modification,” Thomas pressed. There’s no explicit provision in the law that allows the loans to be “cancelled,” Thomas pointed out. Chief Justice John Roberts picked up that same argument. “We’re talking about half a trillion dollars and 43 million Americans,” Roberts said. “How does that fit under the normal definition of modify?”
- John Fritze
Supreme Court arguments underway in Biden student loan forgiveness plan
The Supreme Court’s arguments over President Joe Biden's student loan program got underway a little after 10:10 a.m. ES.T Representing the Biden administration, and starting off the arguments, is Solicitor General Elizabeth Prelogar. Prelogar told the court that without the plan, “defaults and delinquencies will surge.” Congress “expressly authorized” the loan forgiveness during emergencies, she said.
- John Fritze
Ketani Brown Jackson hands down first merits opinion
Associate Justice Ketanji Brown Jackson stands as she and members of the Supreme Court pose for a group portrait following at the Supreme Court in Washington, D.C., Oct. 7, 2022.
Associate Justice Ketanji Brown Jackson handed down her first merits opinion Tuesday in a battle between states over who gets the proceeds of abandoned money orders. Jackson wrote for a unanimous court that as a general matter the proceeds should go to the state where the product was purchased. By tradition, the court tries to assign the least senior justice an opinion that is unanimous.
- John Fritze
Affirmative action: What Justice Jackson's recusal from Harvard case means for Black students
Hundreds gather outside Supreme Court for student loan forgiveness debate
Eliana Reed, 26, stands outside the Supreme Court as justices heard arguments about President Joe Biden's student loan debt forgiveness plan.
Hundreds of protesters gathered outside the Supreme Court on Tuesday ahead of the arguments about Biden's student loan forgiveness program - most of whom appeared to support the plan. Some carried signs that read "Cancel Student Debt." Others proclaimed that "Student debt cancellation is illegal." They chanted phrases throughout, such as "D-E-B-T, student debt is crushing me!" and "Education is a right!" The turnout appeared to be the largest since the high court held arguments last year in the blockbuster affirmative action cases.
Eliana Reed, 26, said efforts to preserve Biden's debt relief program are a "no brainer." That millions of Americans are subject to insurmountable debt they're unable to pay off with their jobs "feels so obviously wrong," said Reed, who has about $17,000 in student debt left.
The issue "taps into so many different groups of people."
- John Fritze and Alia Wong
Supreme Court denied student loan challenges before
Before the Supreme Court scheduled arguments in Tuesday’s student loan cases, it had twice before balked at lawsuits challenging the program.
Associate Justice Amy Coney Barrett in November denied a challenge to the loan forgiveness program from a conservative legal group on behalf of two people entitled to "automatic" cancellation of their debt. The plaintiffs claimed that the automatic cancellation would create "excess tax liability under state law." A month earlier, the court batted away a lawsuit from a Wisconsin taxpayer group.
The reason there are so many lawsuits is that groups opposed to the program have been attempting to find a plaintiff who has standing - in other words, who can demonstrate they are injured by the effort in a way that allows them to challenge it in federal court. Whether the current plaintiffs have standing will be a central part of the argument Tuesday as well.
- John Fritze
Biden: 'I have your back' on student loans
Biden addressed the student loan litigation briefly during remarks Monday night. “My administration is making our case to the Supreme Court, and I’m confident the legal authority to carry out that plan is there,” the president said at a White House ceremony celebrating Black History Month. “I promise you. I have your back.”
- Joey Garrison
Plaintiffs: 'There is a student loan crisis'
New graduates line up before the start of a community college commencement in East Rutherford, N.J., on May 17, 2018.
The plaintiffs challenging Biden's student loan forgiveness plan acknowledge that the current student loan system isn't working. They just don't think Biden's plan will fix it. "There is a student loan crisis in this country," Karen Harned, chief legal officer for the Job Creators Network Foundation, said on a call with reporters Monday. "But this crisis cannot and will not be solved by the president creating a $400 billion program behind closed doors without any input from Congress or the American people."
Questions: Is Biden's student debt forgiveness plan dead?
Rough ride ahead: Biden will be playing defense on student loans at Supreme Court
The group is representing two borrowers: One who didn't qualify for forgiveness because her loans are held by a private, commercial entity and another who didn't qualify for the maximum possible relief because he wasn't a Pell Grant recipient. Biden's proposal would wipe away $20,000 worth of debt for borrowers who also used a Pell Grant to pay tuition. Pell Grants are awarded to students from low-income families. He also wants to erase $10,000 in debt for most other borrowers.
- John Fritze
Plan B on student loan forgiveness? White House won't say.
With many experts predicting President Joe Biden is in for a rough argument Tuesday over his $400 billion student loan forgiveness plan, a natural question has come up repeatedly in recent days: Is there a Plan B if the administration's effort is ultimately struck down?
Give points to White House press secretary Karine Jean-Pierre for answering the question consistently: "We are very much confident in our legal authority here," Jean-Pierre told reporters Monday - echoing the answer she gave to the same question Friday. "That's why our Justice Department has taken it all the way to the Supreme Court."
Translation: If there is a backup plan, the administration isn't ready to talk about it. That's not a surprise, though. A major element of the litigation is whether the administration used the right law to set up the loan forgiveness program. Acknowledging the administration is combing through federal statutes looking for some other way to authorize the program would give ammunition to the plaintiffs on the eve of the arguments.
- John Fritze and Joey Garrison
Justice Thomas wrote of 'crushing weight' of student loans
The Supreme Court won't have far to look if it wants a personal take on the "crushing weight" of student debt that underlies the Biden administration’s college loan forgiveness plan. Associate Justice Clarence Thomas was in his mid-40s and in his third year on the nation's highest court when he paid off the last of his debt from his time at Yale Law School.
Thomas, the court's longest-serving justice and staunchest conservative, has been skeptical of other Biden administration initiatives. And when the Supreme Court hears arguments Tuesday involving President Joe Biden’s debt relief plan that would wipe away up to $20,000 in outstanding student loans, Thomas is not likely to be a vote in the administration’s favor.
--Plan B: Millions of borrowers have had billions in student loan debt erased, and there's more to come.
But the justices' own experiences can be relevant to how they approach a case, and alone among them, Thomas has written about the role student loans played in his financial struggles.
A fellow law school student even suggested Thomas declare bankruptcy after graduating “to get out from under the crushing weight of all my student loans,” the justice wrote in his best-selling 2007 memoir, “My Grandfather’s Son.” He rejected the idea.
- Associated Press
What's in Biden's student loan forgiveness plan?
Biden proposed wiping away $20,000 worth of debt for borrowers who also used a Pell Grant to pay tuition. Pell Grants are awarded to students from low-income families. The president also wants to erase $10,000 in debt for most other borrowers.
Only borrowers with an income less than $125,000, or $250,000 for married couples, would be able to have any debt forgiven.
About 26 million people applied for relief before lawsuits stopped the entire program in its tracks. And of those, 16 million were approved to have a portion, or depending on their balance, all their debt erased. For now, applications are closed.
- Nirvi Shah and Chris Quintana
https://news.yahoo.com/supreme-court-debate-bidens-student-080010139.html?.tsrc=1026
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Millions of student-loan borrowers will experience 'devastating' delays in debt relief if a GOP proposal to cut spending goes through, Biden's Education Secretary says
Ayelet Sheffey
Mon, March 20, 2023 at 11:36 PM GMT+9·
President Joe Biden and Education Secretary Miguel Cardona
U.S. President Joe Biden, joined by Education Secretary Miguel Cardona, speaks on student loan debt in the Roosevelt Room of the White House August 24, 2022 in Washington,
Rep. Rosa DeLauro asked all federal agency heads how GOP spending cut proposals would impact them. The agencies responded on Monday, with Education Sec. Miguel Cardona outlining the "devastating" impact the cuts would have on student-loan borrowers. He said the cuts would delay student-debt relief and make it even harder to get customer service help. Federal agencies are responding to a Republican plan to cut spending levels - and its impacts don't look pretty.
In January, House Appropriations Committee Ranking Member Rosa DeLauro wrote to all federal agency heads asking how a Republican plan to cap fiscal year 2024 spending at the 2022 level would impact their agencies and the Americans they serve.
On Monday, the agencies responded. House Appropriations Committee Ranking Member Rosa DeLauro said in a statement that Republican proposals to cut spending on federal programs would "cause irreparable damage to our communities by gutting the programs every single American relies on. Those proposals are unrealistic, unsustainable, and unconscionable."
"Continued Republican calls for cuts of this magnitude-both secret proposals from Republican leadership and public demands from extremists in the party-would be absolutely detrimental to all Americans, many of whom have not seen a pay raise in years and are struggling to pay their bills," DeLauro added. "The math is not there. These drastic cuts would put people at risk."
Education Secretary Miguel Cardona, in his response, elaborated on the "devastating effects" the GOP proposal would have on students and parents who rely on financial aid - especially student-loan borrowers. He noted that while specifics of the Republican plan have yet to be publicly released, the Education Department analyzed the impacts of capping programs at the fiscal year 2022 level, and 22% below the currently enacted level for fiscal year 2023.
Cardona said the impacts of the decreased spending would be significant when it comes to administering financial aid. A 22% spending reduction would cut $468 million to service financial aid, and if funding were kept at the 2022 level, "more than 40 million student loan borrowers would be impacted through decreased service hours and longer turnaround times to make changes to student loan repayment plans, or obtain a deferment, forbearance, or discharge of student loans."
He added that 17.6 million parents and students who apply for financial aid could experience "multiple-hour wait times and reduced call center hours," and applications for loans could take "weeks longer to process."
Student-loan borrowers are already faced with hours-long wait times to get simple questions answered from the companies that service their loans. With Biden's broad plan to cancel student debt stalled as the Supreme Court makes a final decision on the legality of the relief, borrowers have had questions on what the relief means for their repayment.
One borrower, for example, recently told Insider that "no one is taking the time to help me or to listen to me," causing her to spend hours emailing and calling federal agencies to get help with repayment.
Still, Democrats are waiting for a concrete plan from the opposing party on what type of spending cuts they want to see in a potential deal to raise the debt ceiling and keep the US on top of paying its bills, so it's unclear how exactly the Education Department will be impacted by any forthcoming cuts.
But the agency already has a lot on its plate with minimal resources, given Congress approved a budget last year that did not increase Federal Student Aid's funding. Biden's recently released budget requested a funding increase for the agency to help facilitate a smooth transition to repayment for borrowers this year, but it's not likely to be approved by a GOP-led House.
https://news.yahoo.com/millions-student-loan-borrowers-experience-143600933.html