President Joe Biden and the Supreme Court are battling the student loan forgiveness plan.
The Biden administration's proposed student loan forgiveness plan aims to alleviate the burden of student debt for millions of Americans.
If the plan is allowed to move forward, it could relieve more than 40 million borrowers, with an estimated 20 million having their loan balances wiped out completely.
This would be a significant step towards reducing the $1.6 trillion student loan debt that Americans currently hold.
While the legal battle over the student loan forgiveness plan is focused on its specific provisions and potential constitutional issues, experts say the case outcome will have broader implications for the power of the presidency.
Joe Biden's student loan debt rescue plan faces Supreme Court
According to CBS, President Joe Biden's $400 billion student loan forgiveness plan, which promises relief to more than 40 million borrowers, is facing scrutiny in the United States Supreme Court.
The plan, unveiled in August 2021, would wipe out the loan balances of 20 million borrowers altogether, according to estimates by the White House.
However, six states and two borrowers from Texas are pushing the Supreme Court to invalidate the program, arguing that the Biden administration unlawfully invoked the COVID-19 pandemic to claim extraordinary and transformative power.
The Supreme Court is set to consider two key questions in the case. The first is whether the states and borrowers have the legal standing to challenge the program. The second is whether the Biden administration exceeded its authority with its plan to eliminate $430 billion of federal student loan debt.
The court's decision, expected later this year, could have far-reaching implications beyond student loan forgiveness. USA Today reports that it could potentially undermine Biden's ability to pursue other policies unilaterally, such as those related to abortion and immigration.
This could prove challenging for a president seeking reelection with a Congress that is often gridlocked.
According to Christopher Walker, a University of Michigan Law School professor, the Supreme Court's decision on the student loan forgiveness plan is about more than just student loans.
The professor noted that it is also about the balance of power between the courts and the presidency.
What is the student loan forgiveness plan?
According to CNN, the Federal Reserve Bank of New York reported that millions of Americans are grappling with student loan debt, which has surpassed $1.6 trillion as of the end of last year.
The accumulation of student loan debt is due to increased borrowing over several decades and a surge in educational costs.
The rising cost of college and the inflation rate are other contributing factors that have caused this debt to skyrocket.
President Biden proposed a federal student loan forgiveness program that would provide up to $20,000 in debt relief for Pell Grant recipients and up to $10,000 for other borrowers.
However, the implementation of this program was halted in October after a federal court blocked it. The Biden administration acknowledges the students' problems in America and is trying to alleviate the cost of loan debts.
In addition to the loan forgiveness program, the Biden administration also introduced a new income-driven repayment plan to help make repayment more manageable for borrowers.
This plan aims to cap payments at 5% of the borrower's discretionary income, shorten the time to forgiveness, and cover unpaid monthly interest when balances are low.
While the Supreme Court's decision on the loan forgiveness program remains uncertain, the proposed repayment plan is expected to face fewer legal challenges.
