Press "Enter" to skip to content

National Legal Staffing Support Summarizes 6 Big Takeaways from Supreme Court Hearing on Student Loan Forgiveness

The U.S. Supreme Court held hearings recently that ultimately will determine whether the federal student loan forgiveness plan, put in place through an executive order signed by President Joe Biden, can move forward. National Legal Staffing Support explains that if it were to be allowed to go into effect, millions of Americans would qualify to have as much as $20,000 of federal student loan canceled.

The Supreme Court took on the case and held its hearing at the end of February after the Biden administration appealed two lower court rulings up to the high court. A final ruling isn’t expected until June.

In the meantime, here are six big takeaways from the landmark Supreme Court hearing.

  1. Justices Appear Skeptical

Five justices on the Supreme Court expressed skepticism over whether the student loan forgiveness plan fell under the president’s executive authority. The Biden administration authorized the program under the HEROES Act of 2003.

Yet, a majority of the justices seemed to suggest during the hearings that doing so could be termed an overreach of that act and, as a result, executive authority.

  1. Challengers May Not Have Standing

The justices could disagree with the executive authority used in the program yet still, allow the program to stand. That’s because federal cases need to have standing in order to be brought — and at least four of the justices signaled they’re not sure that either of the challenges, in this case, has standing.

If neither challenger can demonstrate to a majority of justices that they have standing, then the program could be allowed to proceed.

  1. Loan Services Could Have That Standing

During the hearing, Elizabeth Prelogar, the solicitor general, admitted that student loan services could have standing to bring a case of their own against the program. That’s because they have a financial stake that’s much clearer than the current challengers.

No loan servicer has brought a challenge just yet, though.

  1. Backups May Exist

If the Biden administration loses this case, it’s still possible it could try to re-institute the program using a different law. One possibility is the HEA, or Higher Education Act, which gives the Secretary of Education certain powers.

It could potentially take much longer, with more hoops to jump through, to get that done, but it’s possible.

  1. Payments Can Be Suspended

While the forgiveness aspect of the program is in question in this case, almost all of the justices agreed that the Secretary of Education does have the power to suspend loan repayments through the HEROES Act. The Biden administration and the Trump administration both issued pauses on student loan payments, dating back to March 2020.

That was done during the COVID-19 emergency, which the Biden administration plans to end in June. If the president wants to extend the pause, it might be more challenging this time around.

  1. Other Debt Relief Options

The majority of justices during the hearing also seemed to suggest that any student loan forgiveness program that was already existing would be allowed to continue under the HEROES Act.

National Legal Staffing Support LLC explains that two other programs that the Biden administration has also established- the IDR Account Adjustment and the Limited PSLF Waiver- could continue even if the new loan forgiveness program is invalidated.

About National Legal Staffing Support

National Legal Staffing Support is a pioneer and leading provider of legal process outsourcing. Located in Boca Raton, Florida, the company offers front- and back-office support to experienced consumer protection attorneys that specialize in debt resolution. National Legal Staffing Support offers paralegal services, document management solutions, pre-litigation support, pre-filing analysis, research, and client communication management.

Mission News Theme by Compete Themes.