The great student loan forgiveness debate: LI experts weigh in
Student debt relief advocates gather outside the Supreme Court in Washington on Tuesday as the court hears arguments over President Joe Biden's debt relief plan.
Credit: AP/Patrick Semansky
Many Long Islanders are anxiously awaiting the Supreme Court's decision on President Joe Biden's plan to cancel college loan debt, following oral arguments Tuesday on legal challenges to the program.
During the three hours of arguments, some of the high court justices expressed skepticism regarding Biden's authority to do the one-time canceling of debt. Others questioned whether the parties filing the challenges had legal standing.
Several local pundits, reading the signals from the judges, believe the program is in jeopardy.
"I think it's clear that [the court] is not going to allow this to move forward," said Andy Lockwood, an attorney and owner of Lockwood College Prep in Glenwood Landing. He counsels clients on college affordability and helps them obtain loans, grants and scholarships. "I'm telling my clients, 'Do not expect this plan to go through.' "
Dawn Medley, Stony Brook University's vice provost for enrollment management and student retention, said students and graduates are anxiously awaiting the decision.
"We're telling students to wait and see," Medley said. "A lot of students are waiting to hear. A lot of them have already graduated."
Here is a breakdown of the issues, arguments and some analysis by local experts.
The relief plan introduced last August by executive order would cancel $10,000 in federal student loan debt for individuals making less than $125,000, or for households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would receive an additional $10,000.
The loan forgiveness — expected to cost $400 billion over 30 years — only applies to federal loans, not private ones.
Over the years, state support to colleges has diminished and the federal government hasn't filled the gap, resulting in higher costs and more loans for students, Medley said.
"There's been a ballooning of student loan debt [and] the most affected are single women and people of color," Medley said.
The court usually issues its decisions by the end of June.
The court heard two cases. One was brought Sept. 29 by six GOP-led states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. They say loan forgiveness would harm their states economically.
A separate case was brought Oct. 10 by two student loan borrowers — Myra Brown and Alexander Taylor — who did not qualify for the program. Brown is a graduate of University of Texas at El-Paso and the Cox School of Business at Southern Methodist University. Taylor is a graduate of the University of Texas.
The Biden administration says it has the authority to do the plan under the 2003 Higher Education Relief Opportunities for Students Act, or Heroes Act. The law was intended to help military members during the Iraq War, though Biden asserts that the COVID-19 pandemic fits the definition.
Justice Elena Kagan, among the more progressive justices, signaled support for that position during the oral arguments.
“Congress could not have made this much more clear,” Kagan said. “We deal with congressional statutes every day that are confusing. This is not one of them.”
Chief Justice John G. Roberts, however, questioned the administration’s authority.
“If you’re talking about this in the abstract, I think most casual observers would say if you’re going to give up that much … money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on,” Roberts said.
Rodger Citron, a law professor at Touro Law Center in Central Islip, said Roberts is signaling that he believes major programs with large economic impacts should be decided by Congress.
Conservatives, he noted, also have asserted that the Heroes Act is not specific enough to grant Biden unilateral power to enact the loan program.
"The statute says the Education Department can 'waive or modify' the loans. That doesn't say cancel," he said.
Biden is hoping the court finds that Republican-led states and individuals challenging the plan lacked the legal right to sue. The court could then dismiss the lawsuits without ruling on the program itself, essentially letting it move forward.
Conservative Justice Amy Coney Barrett, along with the three liberal justices, questioned the legal standing of the lawsuit by the six states.
Alan Singer, a Hofstra education professor, said he believes the states do not have legal standing.
"They're claiming that in the future, they may incur costs related to the processing of loans. That's speculative," Singer said.
Lockwood disagrees, saying that at least one state, Missouri, has shown it would suffer revenue losses through its student loan servicer.
"It seems pretty obvious to me," he said.
Monthly payments and interest on most federal student loans have been frozen since Congress passed the CARES Act in March 2020. The law, a response to the economic fallout of the pandemic, provided payments to individuals, aid to state and local governments, loans for corporations, and extended unemployment benefits. If the loan forgiveness program has not been implemented and the litigation has not been resolved by June 30, people will have to start paying their loans 60 days after that.
About 26 million people have applied for relief and 16 million have been approved. Applications are currently closed. If a person already has applied for forgiveness, the administration will hold their application.
Citron, the Touro law professor, said he believes the court will split along ideological lines, giving the six conservatives a victory in sinking the plan.
"I think the scope of the program and the importance of the policy requires Congress to specifically authorize it," Citron said.
Singer takes a more cynical approach but predicts the same result. He believes politics will outweigh any interpretation of law. He noted that the court has a 6-3 conservative majority, and conservatives generally have opposed the plan.
"They have political opinions. Now they're looking for legal justification for them," Singer said of the conservative justices. "It's a bastardization of the job of the Supreme Court."
A Supreme Court decision sets a powerful legal precedent.
Medley, the Stony Brook vice provost, said the decision may serve as a check on presidential powers and further define the separation of powers at the federal level.
In deciding whether the plaintiffs had legal standing, the court could set parameters on what cases can come before it, she said. Also, if the court rejects Biden's authority, it could make it harder for any president to start a program under the Heroes Act, she said.
The White House is moving forward with a separate proposal that would lower student debt payments. The new proposal would cap payments for undergraduate loans at 5% of borrowers’ discretionary pay, cutting their bills in half. It also would require payments only for those who earn more than about $30,000 a year.
Supporters see the proposal as helping to make college more affordable. Opponents on the right harshly criticize the plan as a handout that costs too much. If approved, the Biden administration estimates the repayment plan would cost nearly $138 billion over the decade.
With AP
Many Long Islanders are anxiously awaiting the Supreme Court's decision on President Joe Biden's plan to cancel college loan debt, following oral arguments Tuesday on legal challenges to the program.
During the three hours of arguments, some of the high court justices expressed skepticism regarding Biden's authority to do the one-time canceling of debt. Others questioned whether the parties filing the challenges had legal standing.
Several local pundits, reading the signals from the judges, believe the program is in jeopardy.
"I think it's clear that [the court] is not going to allow this to move forward," said Andy Lockwood, an attorney and owner of Lockwood College Prep in Glenwood Landing. He counsels clients on college affordability and helps them obtain loans, grants and scholarships. "I'm telling my clients, 'Do not expect this plan to go through.' "
Dawn Medley, Stony Brook University's vice provost for enrollment management and student retention, said students and graduates are anxiously awaiting the decision.
"We're telling students to wait and see," Medley said. "A lot of students are waiting to hear. A lot of them have already graduated."
Here is a breakdown of the issues, arguments and some analysis by local experts.
Do I qualify for the loan forgiveness?
The relief plan introduced last August by executive order would cancel $10,000 in federal student loan debt for individuals making less than $125,000, or for households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would receive an additional $10,000.
President Biden speaks about student loan debt relief at Delaware State University in October. Credit: AP/Evan Vucci
The loan forgiveness — expected to cost $400 billion over 30 years — only applies to federal loans, not private ones.
Over the years, state support to colleges has diminished and the federal government hasn't filled the gap, resulting in higher costs and more loans for students, Medley said.
"There's been a ballooning of student loan debt [and] the most affected are single women and people of color," Medley said.
When will the Supreme Court decide?
The court usually issues its decisions by the end of June.
Who is challenging the plan?
The court heard two cases. One was brought Sept. 29 by six GOP-led states — Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina. They say loan forgiveness would harm their states economically.
A separate case was brought Oct. 10 by two student loan borrowers — Myra Brown and Alexander Taylor — who did not qualify for the program. Brown is a graduate of University of Texas at El-Paso and the Cox School of Business at Southern Methodist University. Taylor is a graduate of the University of Texas.
What happened during Tuesday's oral arguments?
The Biden administration says it has the authority to do the plan under the 2003 Higher Education Relief Opportunities for Students Act, or Heroes Act. The law was intended to help military members during the Iraq War, though Biden asserts that the COVID-19 pandemic fits the definition.
People rally in support of the Biden administration's student debt relief plan in front of the U.S. Supreme Court in Washington on Tuesday. Credit: Getty Images/Drew Angerer
Justice Elena Kagan, among the more progressive justices, signaled support for that position during the oral arguments.
“Congress could not have made this much more clear,” Kagan said. “We deal with congressional statutes every day that are confusing. This is not one of them.”
Chief Justice John G. Roberts, however, questioned the administration’s authority.
“If you’re talking about this in the abstract, I think most casual observers would say if you’re going to give up that much … money, if you’re going to affect the obligations of that many Americans on a subject that’s of great controversy, they would think that’s something for Congress to act on,” Roberts said.
Rodger Citron, a law professor at Touro Law Center in Central Islip, said Roberts is signaling that he believes major programs with large economic impacts should be decided by Congress.
Rodger Citron, a law professor at Touro Law Center. Credit: Newsday/John Paraskevas
Conservatives, he noted, also have asserted that the Heroes Act is not specific enough to grant Biden unilateral power to enact the loan program.
"The statute says the Education Department can 'waive or modify' the loans. That doesn't say cancel," he said.
Do the plaintiffs have legal standing?
Biden is hoping the court finds that Republican-led states and individuals challenging the plan lacked the legal right to sue. The court could then dismiss the lawsuits without ruling on the program itself, essentially letting it move forward.
Conservative Justice Amy Coney Barrett, along with the three liberal justices, questioned the legal standing of the lawsuit by the six states.
Alan Singer, a Hofstra education professor, said he believes the states do not have legal standing.
"They're claiming that in the future, they may incur costs related to the processing of loans. That's speculative," Singer said.
Hofstra education Professor Alan Singer. Credit: Debbie Egan-Chin
Lockwood disagrees, saying that at least one state, Missouri, has shown it would suffer revenue losses through its student loan servicer.
"It seems pretty obvious to me," he said.
When will debtors have to start making payments again?
Monthly payments and interest on most federal student loans have been frozen since Congress passed the CARES Act in March 2020. The law, a response to the economic fallout of the pandemic, provided payments to individuals, aid to state and local governments, loans for corporations, and extended unemployment benefits. If the loan forgiveness program has not been implemented and the litigation has not been resolved by June 30, people will have to start paying their loans 60 days after that.
About 26 million people have applied for relief and 16 million have been approved. Applications are currently closed. If a person already has applied for forgiveness, the administration will hold their application.
How is the Supreme Court expected to rule?
Citron, the Touro law professor, said he believes the court will split along ideological lines, giving the six conservatives a victory in sinking the plan.
"I think the scope of the program and the importance of the policy requires Congress to specifically authorize it," Citron said.
Singer takes a more cynical approach but predicts the same result. He believes politics will outweigh any interpretation of law. He noted that the court has a 6-3 conservative majority, and conservatives generally have opposed the plan.
"They have political opinions. Now they're looking for legal justification for them," Singer said of the conservative justices. "It's a bastardization of the job of the Supreme Court."
Could the case impact future legal rulings?
A Supreme Court decision sets a powerful legal precedent.
Medley, the Stony Brook vice provost, said the decision may serve as a check on presidential powers and further define the separation of powers at the federal level.
In deciding whether the plaintiffs had legal standing, the court could set parameters on what cases can come before it, she said. Also, if the court rejects Biden's authority, it could make it harder for any president to start a program under the Heroes Act, she said.
What about Biden's other student loan plan?
The White House is moving forward with a separate proposal that would lower student debt payments. The new proposal would cap payments for undergraduate loans at 5% of borrowers’ discretionary pay, cutting their bills in half. It also would require payments only for those who earn more than about $30,000 a year.
Supporters see the proposal as helping to make college more affordable. Opponents on the right harshly criticize the plan as a handout that costs too much. If approved, the Biden administration estimates the repayment plan would cost nearly $138 billion over the decade.
With AP
Craig Schneider is a Long Island native and Stony Brook University alumnus. He joined Newsday as a general assignment reporter in January 2018 after 20 years at the Atlanta Journal-Constitution.
