September 24, 2023

washington – the night before Supreme Court Amanda Smitley sat outside the courtroom on an aluminum blanket holding an umbrella, as she prepared to hear oral arguments on the Biden administration’s student loan forgiveness plan.

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She didn’t know when she planned to spend the night outside the Supreme Court that it would be raining, but she didn’t get discouraged.

“I feel great,” said Smitley, 20, who already has nearly $10,000 in student loans as a college sophomore at PennWest California. She will have to work harder if she wants to fulfill her hopes of graduating and becoming a high school history teacher.

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“I really, really care about student loans, not even just for myself,” Smitley said. “I want to live in a world where my future students and perhaps future children don’t have to worry about going thousands in debt as they seek to further their education.”

Court will hear two cases against apology

Despite the bitter cold, debtors gathered outside the Supreme Court on Monday to demonstrate in favor of the Biden administration’s forgiveness plan. More than 35 million student loan borrowers can benefit from this policy, and up to $20,000 of their loan can be forgiven. If implemented, an estimated $400 billion in debt would be eliminated.

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But the program has been stalled since the fall, when a federal appeals court panel in St. Louis issued a temporary injunction preventing it from taking effect. The Supreme Court has kept that injunction in place as it considers challenges to the plan, and the government of its own accord stopped taking applications for the program in November.

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The Supreme Court is hearing two separate cases on Tuesday on President Joe Biden’s debt relief plan.

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The first, originally filed by six Republican-led states in federal court in Missouri, claims the Biden administration did not have the legal authority to cancel student loan debt without authorization from Congress.

The second lawsuit, filed in US District Court in Texas by Myra Brown and Alexander Taylor, argues that they and other members of the public were unreasonably denied the right under federal procedures to formally comment on the debt relief plan who could be affected by it. before the design is implemented.

The Job Creators Network Foundation, a conservative advocacy group, is supporting the plaintiffs in that case.

Experts say the debt relief plan is likely to be declared invalid by the court’s six-judge supreme majority if that block finds that one or more of the plaintiffs in the two cases has the necessary legal authority to To file a suit to challenge, known as standing. Program.

‘It’s life and death for many’

Student loan borrower John Runnington was among those who planned to sleep outside the Supreme Court on Monday night. He attends the Minnesota State Community and Technical College and owes $5,000.

That debt has already made his life more difficult.

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“It has kept me from getting a vehicle, moving out of my parents’ house and helping my parents with the stress of bills,” said Runningen, 22.

As a first-generation college student, he hoped to break the cycle of poverty and help support his parents. His stepfather is a farmer and his mother works at a gas station. With a $175 monthly student loan bill, though, he won’t be able to help them.

“To some this may not seem like a lot of money, but for people in rural communities or those struggling with poverty, it will be the difference between being able to feed my family or [being] able to afford the electric bill,” Runningen said.

Within three weeks after the application process opened, the Biden administration reported that more than 26 million people applied for relief, with 16 million requests approved.

There is no precedent in US history for the kind of sweeping loan forgiveness the White House has promised, though consumer advocates say big corporations and banks bailed out by the government after going through crises of their own Is. And they say canceling a large chunk of education loans is necessary to provide relief to many borrowers struggling with a broken lending system.

Student loan borrowers were having trouble repaying their loans before Covid. Only about half of borrowers were in repayment in 2019, according to an estimate by higher education expert Mark Kantrowitz. A quarter – or more than 10 million people – were delinquent or in default, and the rest applied for temporary relief measures for struggling borrowers, such as deferments or forbearances.

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These grim figures drew comparisons to the 2008 mortgage crisis and put pressure on Biden to deliver relief.

“For many people, it’s life and death,” said Thomas Gokey, co-founder credit union, a national association of debtors. “What’s at stake is between paying off student loans or being able to buy groceries, pay rent and medical bills.”

— Annie Nova reported from Washington, DC, and Dan Mangan from New York.