Supreme Court Ruling on Biden's Student Loan Forgiveness Plan—What to Know

Millions of Americans are waiting to find out whether the Supreme Court will allow President Joe Biden's student loan forgiveness plan to go ahead.

Biden's program, announced last year, would wipe away the federal student loan debt of some 20 million Americans, while lowering the balances of about another 20 million.

The Supreme Court is weighing two challenges to the plan. One involves six Republican-led states, while the other involves a lawsuit filed by two students.

The Republican-led states and lawmakers have argued the plan is a violation of Biden's executive authority and pointed to its hefty price tag. Democratic-led states and liberal interest groups are backing the Biden administration in urging the court to allow the plan to take effect.

But Americans will have to start making federal student loan payments again at the end of the summer under the terms of a debt ceiling deal approved by Congress, regardless of what the Supreme Court, dominated six-three by conservatives, decides.

Here's what to know.

When Will the Supreme Court Rule on Student Loans?

The Supreme Court issues its opinions on designated days.

There are currently only two remaining dates in June on the court's calendar when opinions are set to be issued: Thursday, June 15, and Friday, June 16.

So a decision on Biden's debt relief plan could come by the end of this week, unless additional opinion days are added.

A conference is scheduled on Thursday, June 22, and additional opinions could possibly be released then.

All opinions are typically handed down by the last day of the court's term in late June or early July and there are no rules about when decisions must be released with the exception of that deadline.

Who Will Be Eligible for Student Loan Forgiveness?

Biden's plan, which seeks to deliver on a campaign promise, would forgive up to $10,000 in federal student loan debt for borrowers if they make less than $125,000 individually or $250,000 as a family.

Pell Grant recipients, who typically demonstrate more financial need, would get an additional $10,000 in debt forgiven.

The White House said in January that more than 16 million people had been approved for debt relief out of 26 million who had applied in the four weeks that the application was available.

What Have the Justices Said About Student Debt Relief?

The Supreme Court heard oral arguments in cases challenging Biden's plan in February.

The court's conservative justices suggested the Biden administration had exceeded its authority with the plan.

Chief Justice John Roberts pointed to the program's impact and cost as reasons the administration should have gotten explicit approval from Congress.

The Biden administration says the program is grounded in the Higher Education Relief Opportunities for Students Act, a law commonly known as the HEROES Act that was enacted in response to the military conflicts in Iraq and Afghanistan. It is estimated to cost $400 billion over 30 years.

"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, The Associated Press reported

Justice Brett Kavanaugh said it "seems problematic" for the administration to use an "old law" to unilaterally implement a debt relief program that Congress had declined to adopt.

The court's liberal justices expressed concern for borrowers who would struggle to make their loan payments if relief isn't granted.

Justice Sonia Sotomayor said her fellow justices would be making a mistake if they take for themselves "the right to decide how much aid to give" people who will struggle if the program is struck down, instead of leaving it to education experts.

What Has the President Said?

Last week, Biden vetoed legislation that would block his student loan forgiveness plan. The bill passed Congress with support from some moderate Democrats.

In a video announcing his veto, Biden pledged to continue his efforts on student loan forgiveness.

"I'm not going to back down on my efforts to help tens of millions and working and middle class families. That's why I'm going to veto this bill," Biden said.

"And don't forget, some of the same members of Congress who want to cut student aid personally received loans to keep their small businesses afloat during the pandemic."

When Will Loan Payments Resume?

A three-year pause on student loan payments prompted by the COVID pandemic will soon come to an end.

Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October.

In a statement to Newsweek, an Education Department spokesperson said: "We recognize that the return to repayment would result in significant financial hardship for many borrowers. That is why this Administration also put forward a plan to provide up to $20,000 in debt relief for hard-working Americans recovering from the economic harms of the pandemic, most of whom make less than $75,000 a year, and why we continue to fight for that relief on behalf of the millions of borrowers who need it.

"We will also be in direct touch with borrowers and ramping up our communications with servicers well before repayment resumes to ensure borrowers and their families are receiving accurate and timely information about the return to repayment."

The spokesperson added: "In spite of our opponents' best efforts to sabotage our work to support student borrowers, we are fully committed to helping borrowers successfully navigate the return to repayment with the pandemic now behind us."

Update 6/20/23, 7:20 a.m. ET: This article has been updated with a statement from the Education Department.