President Biden’s plan to forgive up to $20,000 in student loan debt was already in crisis—tied up in legal challenges that have already reached the Supreme Court.
But the Administration’s announcement that it is ending the COVID-19 national and public health emergencies on May 11 could spell its doom, according to legal experts. The federal pause on student loan payments may also be in jeopardy.
At least 16 million Americans were approved for the program, but relief was put on pause by two separate federal court rulings, including by a judge from Texas who said the program was an “unconstitutional” use of power.
Biden’s legal justification for forgiving student debt relied on the HEROES Act, which allows the Department of Education to modify provisions of student loan programs to alleviate financial hardship borrowers might face during national emergencies.
The plan, announced in August, would impact 40 million Americans. It would forgive up to $10,000 of student loan debt for most borrowers, and up to $20,000 for those who went to college on Pell Grants. Only those earning less than $125,000 per year are eligible.
In a November court filing, U.S. Department of Education Undersecretary James Kvaal outlined the Administration’s argument, saying that unless the Administration is allowed to take action, there could be a “large increase in the amount of federal student loan delinquency and defaults as a result of the COVID-19 pandemic.”
But the Administration’s decision to end the public health emergency puts the crux of the Education Department’s argument at high risk, says Jed Shugerman, a professor who studies executive branch powers at Fordham Law School.
“It is possible in the wake of an emergency, that one would have a program to deal with the fallout of an emergency,” he says. “The problem is that the program is not tailored to the emergency.”
In order to have the authority to forgive student loans, the Education Department agreed that it would have to show that recipients of the program faced a strong financial burden as a result of COVID-19. While nearly 17 million Americans were unemployed at the height of the pandemic, workers in other industries—like streaming services or video conferencing businesses such as Zoom—thrived. Since borrowers were not required to provide evidence of a financial burden when applying for student loan forgiveness, the Administration’s argument is faulty, Shugerman says.
“The only excuse for not actually having any step to show a causation or correlation from the emergency would be if the emergency was still happening,” he adds.
Meanwhile, the Education Department maintains that Biden’s debt relief plan remains justified even after the national emergency ends. “Our debt relief plan is needed to prevent defaults and delinquencies as student borrowers transition back to repayment after the end of the payment pause,” an administration official told TIME in a statement. “There was a national emergency that impacted millions of student borrowers. Many of those borrowers still face risk of default on their student loans due to that emergency. Congress gave the Secretary of Education the authority under the HEROES Act to take steps to prevent that harm, and he is.”
The Supreme Court will hear oral arguments over student loan relief at the end of February.
What is the future of student loan forgiveness?
Experts tell TIME it’s increasingly likely the Supreme Court will strike down Biden’s loan forgiveness plan in the following weeks.
The best path forward would be to create a new plan that could be justified under the Higher Education Act of 1965, which aimed to increase access to college and university, says Shugerman.
Implementing a student loan forgiveness plan under that statute, while a better fit, would take longer. But experts say Biden could still pass some sort of relief for borrowers by the end of his term if the Administration acts promptly.
Student loan payments likely to resume
Experts tell TIME that the student loan payment pause could also run out as a result of Biden ending the COVID-19 emergency.
Student loan payments have been paused since March 2020. Payments were set to resume 60 days after the Education Department was allowed to implement the student loan forgiveness program, or when litigation around Biden’s student loan relief program ends.
“I don’t think it would be out of the question that if the case came down after May, the payment cost pause could extend a little bit longer,” Luke Herrine, Assistant Professor of Law at the University of Alabama tells TIME. “But the Biden Administration would have eliminated its justification for continuing to extend it much beyond what it takes to resolve the legal dispute.”
Other measures to forgive student loans
In the meantime, the administration is already considering structural changes to student loan plans. In early January, the Education Department announced new proposed regulations that could cut monthly payments in half for the 10 million borrowers enrolled in an income-driven repayment plan.
Those changes are not yet confirmed, but if the proposal goes into effect, Black, Hispanic, American Indian, and Alaska Native borrowers could see their lifetime payments per dollar borrowed cut by 50%. An earlier initiative announced in April said the Department of Education would conduct a one-time account adjustment that would extend borrowers’ payment histories to include credit for partial and late payments. Eligible borrowers would automatically see the adjustment on their account.
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