Student loan forgiveness: In danger?

Is student loan forgiveness in danger?

   President Joe Biden (Photo by Denis Doyle/Getty Images) 
  Getty Images
President Joe Biden (Photo by Denis Doyle/Getty Images)

The U.S. Supreme Court could reject President Joe Biden's effort to carry out widespread student loan forgiveness.

The following information will be useful for you, and it could help you manage your student loans.

Student loans allow students to pay for their education.

There may be bad news for student loan borrowers hoping for widespread student loan forgiveness. Student loan borrowers have eagerly awaited the president's decision on the future of student loan forgiveness. However, the White House has denied that Biden agreed to cancel $10,000 of student loans for borrowers. With student loan borrowers singing their own version of "The End of The World," it’s unclear if cancellation will ever become a reality. Even if Biden does proceed with canceling millions of students' loans, one institution could stand in his way: the U.S Supreme Court (USSC). Here's why the USSC could reject Biden's attempt to cancel your student loans.

The Supreme Court may reject student loan forgiveness if the case is appealed

What does the Supreme Court have to do with student loan forgiveness? After all, Biden hasn't enacted widespread student loan forgiveness. But as Axios explains, recent Court decisions demonstrate a pattern of limiting executive power. Student loan forgiveness could be next on the list, because the Court has recently prevented:

  • because of the Covid-19 outbreak, the CDC was unable to enforce a moratorium on evictions;
  • OSHA has decided not to enforce a vaccine mandate in workplaces.
  • the EPA's failure to implement proposed limits on greenhouse gasses.

In the wake of the recent decision on abortion, there could be additional decisions to “limit the power of agencies in the executive branch.” Specifically, the Court could restrict executive branch authority — and U.S. Department of Education may find its legal scope limited.

Congress has the authority to cancel student loans

Sen. Elizabeth Warren (D-MA) and Senate Majority Chuck Schumer (D-NY) say that Congress gave President Trump the power to cancel student loans in the Higher Education Act of 1965. They claim that under Cardona's leadership, Biden could cancel more than $1 billion in student loans for borrowers if he chooses to do so.

A legal basis for rejecting student loan cancellation is the lack of evidence

Axios says that Biden may not be able to cancel student loans, because of at least two legal doctrines. The conservative justices on the Supreme Court have expressed doubt about:

  1. The Chevron Doctrine: when a law is not clear, courts will defer to the executive agency that implements it;
  2. The Nondelegation Doctrine: Congress cannot delegate to the executive branch any of its powers.

How does this relate to student loan forgiveness? Under the Chevron principle, the U.S. Department of Education manages student loans and, therefore, would decide how to cancel them. The Higher Education Act references the Education Department’s ability to cancel debt but doesn't specifically state that it has sole power to do so; if Congress wanted to surrender all authority for cancellation to the executive branch, it would have explicitly stated so in the statutory language. Section 432A of the Higher

The "nondelegation doctrine" would further strengthen the Court's ability to reject wide-scale student loan cancellation. Justices Neil Gorsuch, Clarence Thomas and Samuel Alito could rely on this doctrine to deny Biden's attempts to implement wide-scale student loan relief. This doctrine says that even if Congress delegates a power to the executive branch, it could still be unconstitutional. How does this apply to student loan forgiveness? Let's assume that Congress delegated its authority to cancel student loans to the executive branch, as Warren and Schumer have argued. For example, the conservative majority could still deem this unconstitutional because the U.S. Constitution grants Congress the power of the purse. This constitutional power includes creating and canceling student loans; as a result of which, as per what Court might argue, Congress cannot delegate its authority over president to do so.Biden hasn't announced whether he will cancel student loans or how much he could cancel them and how he would do so yet.For students who are in debt with their education expenses they should focus on restarting their payments next month because here are some of best ways for themto save money:

  • Refinancing student loans (lower interest rate + lower payment) can result in a great deal of savings.
  • When you have a low income, your monthly payments will be lower.
  • The federal government has a program that can help with repayment of student loans.

The Department of Education estimates that 9 million borrowers could be eligible for student loan forgiveness.

Senators have proposed major changes to the student loan forgiveness program

The way to get up to $6 billion in student loan forgiveness

Education Department announces major changes to student loan servicing