WORLD NEWS | Supreme Court weighs in on multi-billion dollar Biden student loan plan

WASHINGTON, Feb. 28 (AP) — The Supreme Court is waging a partisan legal battle over President Joe Biden’s plan to cancel or reduce the student loans held by millions of Americans.

The high court, which holds a 6-3 conservative majority, will hear arguments on Tuesday in two challenges to the plan, which has so far been struck down by Republican-appointed lower court judges.

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The debate was planned to last two hours, but could go on longer. The public can listen to it on the court’s website.

The Biden administration said 26 million people have applied for and 16 million have been approved for forgiveness of up to $20,000 in federal student loans. The program is expected to cost $400 billion over 30 years.

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“I believe the legal authority to execute that plan is there,” Biden said Monday at an event marking Black History Month.

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

Republican-led state and congressional lawmakers, as well as conservative legal interests, have opposed the plan as a clear violation of Biden’s executive powers.

Democratic-led states and liberal interest groups backed the Democratic administration in urging the courts to allow the plan to go into effect.

Without it, the government said, loan defaults would rise sharply when the moratorium on loan payments ends no later than this summer.

Payments were halted in 2020 as part of the response to the coronavirus pandemic.

A 2003 law, commonly known as the HEROES Act, allows the Secretary of Education to waive or modify the terms of federal student loans during a national emergency, the government said.

The main purpose of the law is to prevent service members from worsening financially during the wars in Afghanistan and Iraq.

Nebraska and other states that have filed the lawsuit say the plan is not necessary to keep default rates roughly where they were before the pandemic.

States say the 20 million borrowers whose entire loans have been canceled will receive a “windfall” that will put them in a better position than they were before the pandemic.

On a wet Monday night, dozens of borrowers from across the country camped near the courthouse, hoping to have a seat for debate. These include Sinyetta Hill, who said Biden’s plan would wipe out about $500 of the roughly $20,000 in student loans she owns.

“I was 18 when I signed up for college. I didn’t know it would be such a burden. No student should have to deal with this.” Hill, 22, said she plans to study after graduating from the University of Wisconsin-Milwaukee in May. law.

Biden’s plan is likely to get a cold shoulder in court. Conservatives on the court have been skeptical of Biden’s other moves related to the pandemic, including vaccine requirements and a moratorium on evictions.

These measures are primarily promoted as public health measures aimed at slowing the spread of COVID-19.

By contrast, the loan forgiveness program was designed to address the economic impact of the pandemic.

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

In addition to the debate over the authority to forgive student debt, the court will also face whether the states and two individuals challenging before the judge have the legal right or standing to sue.

Parties generally must show that they would suffer financial loss and benefit from a court ruling in their favour.

A federal judge initially ruled that the states would not be harmed and dismissed their lawsuit before an appeals panel said the case could move forward.

Of the two people suing in Texas, one has commercially held student loans and the other is eligible for $10,000 in debt forgiveness instead of the maximum $20,000. If they win the case, they get nothing.

A decision is expected in late June. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)