As the Supreme Court is set to make a decision on whether the Biden administration’s plan to cancel student loan debt is legal, one U.S. senator has called for urgent action.
“Let me be very clear, President Biden has the legal authority to cancel student-loan debt,” Massachusetts Democratic Senator Elizabeth Warren said, during a webinar held by several advocacy groups.
“If the Supreme Court follows the law instead of playing politics,” she added, “they will make clear that the Republican attempt to stop student-loan debt relief is baseless, and that that relief will go forward immediately.”
There are currently over 40 million student debtors. While they were not required to make repayments on their federal student loans due to a pause on payments first enacted by former President Donald Trump, they now owe $1.6 trillion in outstanding loans, according to the New York Fed, as of the first quarter of this year.
Payments on these loans will need to start again on Oct. 1, 2023.
Meanwhile, the Biden administration has proposed cancelling up to $20,000 in student-loan debt for a wide swathe of borrowers. Six Republican-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina — and two student-loan borrowers sued over the plan.
The Supreme Court will likely decide the fate of these suits and the Biden administration’s debt-relief plan in the coming days. The court is considering two questions, whether the parties have standing, or the right to sue, and whether the Biden administration overstepped its executive authority in issuing the policy.
The states argue they have standing to sue largely because the plan could impact the bottom line of MOHELA, a student-loan servicer created by Missouri’s state legislature, which could, in turn, hurt Missouri’s state coffers. The borrowers said they sued over the debt-relief plan in part because the Department of Education didn’t seek public comment on it, depriving them and other stakeholders from weighing in. That, they argue, resulted in a policy that arbitrarily benefitted some, and not others, like themselves.
The administration has said neither of the parties have standing to bring the case. Officials have also argued that the Department of Education has the authority to carry out the debt-relief plan. Under the HEROES Act of 2003, the administration argues, the Secretary of Education can “waive or modify” any student-loan programs during national emergencies.
“The urgency of the moment cannot be overstated,” Warren said during the webinar.
Advocates and activists have said that even if the justices say the HEROES Act doesn’t authorize the debt-relief plan, the Biden administration has the authority to cancel student debt through other legal avenues.
The HEROES Act “has always been only one of many legal authorities that can be used” to cancel student debt, Aissa Canchola Banez, senior advisor for policy and strategy at the Student Borrower Protection Center, said on the webinar.
“We expect this administration to explore every option available,” she said.
Warren first brought the idea that the executive branch has the power to cancel student debt to the mainstream during her 2020 presidential campaign.
During the webinar, Warren also talked about how the skyrocketing price of college tuition is a fundamental reason for why Americans owe more than $1 trillion in student-loan debt.
“I’ve been in this fight for a long time and part of the reason is because it’s personal,” Warren said.
“I was the first person in my family to graduate from college. My daddy ended up as a janitor, but I had a chance to go to school because I went to a commuter college that cost $50 a semester,” she shared.
“I then went to a public law school where I got a great education and I was able to do this because I grew up at a time in America when our country was investing in me and in our future,” Warren added.
“That opportunity is just not out there today,” she said.
“A young person can pay up to 200% more in tuition than what her parents paid when they went to college, and that’s just fundamentally wrong,” Warren said.
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