Student loan forgiveness is in SCOTUS’s hands as Biden’s plan hits roadblocks

Candy or coal… Student loan borrowers are holding their breath to see if they’ll actually get loan forgiveness in the new year. Refresher: a few weeks before midterms, President Biden announced that the Education Department would forgive $10K in federal loan debt for people making under $125K/year and $20K for Pell Grant recipients.

The plan would cost the US $400B and cover most of the 45M borrowers who owe $1.6T in loan debt (with 15M getting fully absolved).

The hold-up: Six GOP-led states brought a case against the plan, and the US Supreme Court agreed to take it after the DOJ asked it to reverse an injunction that blocks the program from taking effect.

The status: On pause. 26M borrowers have already applied for relief and some have been approved, but servicers have been blocked from canceling loans. Borrowers who haven’t yet applied currently don’t have the option. Meanwhile, loan payments have been paused since March 2020.

Next steps: SCOTUS is set to hear arguments in February to help it decide whether the forgiveness policy is an overreach of executive power or if it causes harm to plaintiffs. Some experts think the conservative-majority court will rule it as unconstitutional.

The ball is in your Court. As the final arbiter, SCOTUS’s charge is to uphold and interpret the Constitution. Historically, the court has typically ruled in line with public opinion. But in a recent Economist-YouGov poll, 51% of respondents said they support Biden’s relief plan while 40% were opposed. Critics worry it’ll exacerbate inflation and penalize those who’ve already paid off debt. Supporters say it’ll help money-strained Americans get by — while progressives want cancellation of all $1.6T in student debt.


Student loans are a Sisyphean struggle… Just as the mythical Sisyphus had to roll a boulder uphill only to have it roll down again for eternity, loans will keep piling up forever unless a key issue is resolved: college (in)affordability. One-time forgiveness would be a much-needed relief for millions, but it won’t fix the long-term problem: college tuition has jumped 5X more than inflation in the past half century.

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