Millions of American student loans at stake in Supreme Court

The highest U.S. court on Tuesday is examining Joe Biden’s decision to give a slice to fellow citizens and former scholarship recipients who earn less than $125,000.

Via Le Figaro with AFP

Posted 02/28/2023 at 04:37Upgrade 02/28/2023 at 06:42

there US Supreme Court Tuesday, February 27, examines a major move aimed at canceling part of Joe Biden’s massive student loan debt, the biggest economic stakes and the highest-risk file for a Democratic president.

The nine panelists will question administration representatives who want to bail out millions of borrowers and opponents of the plan who decry it as a costly abuse of power during the highly anticipated hearing. Their ruling, expected before June 30, will have a direct impact on alumni finances, but not only that: the high court, firmly anchored in conservatism, could use the case to limit the president’s room for maneuver.

During the trial, the judges had to juggle insane sums: nearly 43 million Americans have federal student loans to repay a total of $1.630 billion. At the start of the pandemic, as the economy went into hibernation, Republican President Donald Trump’s administration stopped repaying these loans under a 2003 law. “Relief” In the case of student loan holders“National Emergency”. This operation continues unabated till date.

400 billion dollar bill

At the end of August, President Biden, who defines himself as a champion of the working class, wanted to go further: announcing that he would eliminate $10,000 from borrowers making less than $125,000 a year and $20,000 for former scholarship recipients. Candidates rushed in and 26 million applications were filed, putting the state’s overall bill at $400 billion, according to the White House.

Justice, however, blocked the implementation of the program after it was seized by a coalition of Republican states, but by two students who did not qualify for the $20,000 rebate. They accuse the democratic administration of abusing its powers under the pretext of the pandemic and disbursing taxpayers’ money without consulting parliamentarians. According to them, the 2003 Act involves freezing of debt and not its cancellation. “Court must again prevent Congress from using Covid-19 to seize power beyond what it intended”The state of Nebraska and its allies wrote in an argument sent ahead of the hearing.

“A breath of fresh air for tens of thousands of Americans”

“We are confident that we have the legal authority to do so.” must work, White House spokeswoman Karine Jean-Pierre recalled during a press briefing on Monday as the ultimate goal of the plan. “A breath of fresh air for tens of thousands of Americans”. However, the high court has already caused several setbacks in democratic governance, invalidating measures taken to prevent evictions during pandemics or to force vaccinations on certain people. In an attempt to avoid a new tragedy, the Democratic Party government is arguing that the plaintiffs have no right to legal action. “No harm done”. He is asking the court to dismiss their complaint on these grounds without ruling on the merits.

Conversely, other actors hostile to a strong central power believe that the US Constitution will take advantage of the issue to clip the wings of the federal government. “This case provides a timely opportunity to strengthen constitutional protections to prevent executive agencies and branches of the executive from exercising legislative functions.”As a result, the employers’ body, the Chamber of Commerce, wrote to the court. “Significant policy decisions cannot be made without the express consent of Congress”.

This was used by the High Court “doctrine” Last June to limit the Environmental Protection Agency’s powers in the fight against global warming. If strengthened, the government will be unable to act on important issues at a time when Congress itself is paralyzed by party divisions.