In two cases that could determine the fate of more than 40 million Americans’ student debts, the US Supreme Court is currently hearing arguments.
It follows the Democratic President Joe Biden’s announcement of a plan to cancel up to $10,000 (£8,400) in federal student loans per borrower last year.
Republican-appointed judges on lower courts have so far obstructed the idea.
On Tuesday, senior judges questioned whether the president’s actions were justified and within the law.
By the end of June, the 6-3 conservative majority Supreme Court will issue a decision on the cases.
Due to the coronavirus epidemic, student loan repayments were initially suspended during the Trump administration in 2020.
Mr. Biden maintained that hold-off until he made the decision in August to forgive more than $400 billion in debt, up to $10,000 for each person making less than $125,000 and up to $20,000 for students receiving need-based Pell Grants.
In accordance with the White House’s plan, about 90% of the nation’s student loan borrowers will be eligible for relief, and about 26 million people have already applied for forgiveness. As a result of legal challenges to the scheme, however, relief is on wait.
According to the Biden administration, a 2003 law known as the Higher Education Relief Opportunities for Students Act, or HEROES Act, gave it the authority to “waive or modify” federal student loan debt.
On Tuesday morning, government attorneys were pressed to support that expansive reading of the law.
“43 million Americans and $500 billion are at issue here. How does that fit into the definition of modified as we usually use it?” Elizabeth Prelogar was questioned by Chief Justice John Roberts during the oral arguments.
According to Mrs. Prelogar, “modify” in this context could mean making significant adjustments to protect borrowers. She continued by saying that the administration’s goal was to develop a benefits program rather than exercise regulatory authority.
Without the strategy, “defaults and delinquencies will soar,” she claimed.
Hundreds of people participated in protests outside the Supreme Court before to the hearing, braving the rain and cold.
Several of the most vocal members of the Democratic Party on the subject of student debt joined them. Senator Elizabeth Warren expressed concern that “an extremist court” could take away the chance “to construct more secure futures,” while Congresswoman Ayanna Pressley argued that those opposed to loan forgiveness were “disconnected from the hardship of real people.”
What the White House will do if the Supreme Court overturns its strategy has not yet been announced.
At the daily press briefing on Monday, press secretary Karine Jean-Pierre stated that the administration is “quite confident in our legal power here.”