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Supreme Court Ruling May Be a Clue About High-Stakes Student Loan Case

Supreme Court Ruling May Be a Clue About High-Stakes Student Loan Case


A 7-2 Supreme Court of the United States ruling made on Thursday could be evidence of how the court will rule in one of two issues challenging President Joe Biden’s student loan relief plan.

Student loans have recently been thrust into the political spotlight after President Joe Biden promised to eliminate up to $20,000 in federal student loans for some borrowers. The plan has received extensive backlash, primarily from Republican lawmakers who argue the expensive plan is a violation of Biden’s authority. The plan would cost the nation hundreds of billions of dollars and is being challenged in the U.S. Supreme Court, with a decision expected by late June or July.

The Supreme Court is gearing up to end its 2022-23 term with a bang, as it has yet to decide several major cases. Biden’s student loan debt plan is chief among them. Many borrowers are eagerly awaiting the decision as loan interest and payments will resume 60 days after June 30. Interest and payments were temporarily paused during the COVID-19 pandemic, and their return adds even more weight to the high-stakes case.

Student loan borrowers and advocates gather for the People’s Rally To Cancel Student Debt During The Supreme Court Hearings On Student Debt Relief on February 28, 2023, in Washington, D.C. A 7-2 Supreme Court of the United States ruling made on Thursday could be evidence of how the court will rule in one of two issues challenging President Joe Biden’s student loan relief plan.
Jemal Countess/Getty

The Supreme Court must weigh two legal decisions when it comes to the rule in Biden’s plan. The court must decide whether Biden and his administration had the authority to enact the nationwide plan. More specifically, the court will have to decide if certain challengers to Biden’s plan have legal standing to sue Biden.

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A collection of conservative states have united in a lawsuit challenging Biden’s decision, arguing that the student loan relief would financially injure the states by causing state-affiliated loan servicing agents to lose money. The states argue that this directly impacts their financial situation.

However, the Supreme Court will soon decide if the states have legal standing to sue Biden on the topic. A recent ruling in a separate case provides a window into the Supreme Court’s view on the subject.

On Thursday, a ruling authored by conservative Justice Amy Coney Barrett provided a glimpse into what the justices may decide regarding the latter when it comes to student loan debt relief.

Haaland v. Brackeen challenged the Indian Child Welfare Act, which permitted Native American children to remain with Native American families in the midst of custody battles. Several petitioners, including the state of Texas, sued the United States government in an effort to overturn the law on the basis that it was unconstitutional considering it disrupted non-Native American families from adopting Native American children.

However, in Barrett’s opinion, the Supreme Court rejected the challenge because of “lack of standing”.

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“The issues are complicated,” Barrett wrote in the opinion. “But the bottom line is that we reject all of petitioners’ challenges to the statute, some on the merits and others for lack of standing.”

Although Haaland v. Brackeen is an issue far from the topic of student loan relief, Barrett’s position on the petitioners’ lack of legal standing could imply that the Supreme Court will be inclined to rule in a similar way in the future.

A similar ruling would be favorable to Biden and his student loan plan and would be beneficial for the President, considering a recent poll conducted exclusively for Newsweek that found support for Biden’s debt relief plan has fallen.

“Justice Barrett’s ruling on ICWA gives the Biden administration hope in the student loan relief case,” Neama Rahmani, a former federal prosecutor, told Newsweek via email.The Supreme Court is more likely to find that the Republican states and borrowers who don’t qualify for forgiveness lack standing to bring suit, than to find that the administration has authority to forgive the debt without Congressional approval. Standing is a better legal argument and a less bitter pill for the conservative justices to swallow. Any decisions by the high court on standing grounds are a good sign for those in favor of student loan relief.”

Newsweek reached out to several former federal prosecutors by email for comment.

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Published: 2023-06-16 19:51:45

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