{"id":3456,"date":"2023-04-13T14:40:05","date_gmt":"2023-04-13T18:40:05","guid":{"rendered":"https:\/\/www.skypointfcu.com\/wph\/workarea\/?p=3456"},"modified":"2023-04-13T14:40:28","modified_gmt":"2023-04-13T18:40:28","slug":"supreme-court-student-debt-cancellation-cases-4-expert-takeaways","status":"publish","type":"post","link":"https:\/\/www.skypointfcu.com\/wph\/workarea\/blog\/supreme-court-student-debt-cancellation-cases-4-expert-takeaways\/","title":{"rendered":"Supreme Court Student Debt Cancellation Cases: 4 Expert Takeaways<\/strong>"},"content":{"rendered":"\n

As the oral arguments around President Joe Biden\u2019s student loan forgiveness plan unfolded at the Supreme Court on Tuesday, activists, borrowers and experts packed the courtroom, while protestors gathered outside<\/a>. <\/p>\n\n\n\n

\u201cIt was the Super Bowl for student loan nerds,\u201d says Betsy Mayotte, founder and president of The Institute of Student Loan Advisors, of the arguments \u2014 which lasted nearly two hours longer than scheduled. \u201cBut the problem is, we don\u2019t know the outcome of the game for a long time.\u201d<\/p>\n\n\n\n

A decision is expected by late June. Between now and then, the nine justices will evaluate two key lawsuits and determine if some 40 million Americans will see up to $20,000 of federal student debt erased<\/a>.<\/p>\n\n\n\n

Here are four key takeaways from the arguments, according to academics, lawyers, student loan experts and activists.<\/p>\n\n\n\n

1. Standing could determine the Supreme Court ruling <\/strong><\/p>\n\n\n\n

Much of the oral arguments centered on legal standing<\/a>, which is the right of a party to bring a lawsuit to court. In the first case, Biden v. Nebraska, several justices questioned whether Missouri \u2014 one of six states suing \u2014 had the right to bring a case on behalf of Mohela, an independent state-created student loan servicer. <\/p>\n\n\n\n

\u201cUsually, we don\u2019t allow one person to step into another\u2019s shoes and say, \u2018I think this person suffered harm\u2019 even if that harm is very great,\u201d said liberal Justice Elena Kagan.<\/p>\n\n\n\n

In the second case, Department of Education v. Brown, the justices questioned if the two plaintiffs \u2014 individuals who claim they weren\u2019t eligible for part or all of the relief \u2014 were harmed by not having the opportunity to participate in a notice-and-comment period for the program.<\/p>\n\n\n\n

In the Mohela case, the federal government is \u201cessentially arguing that the scope is too broad\u201d and in the second case, it\u2019s \u201carguing that the scope is too narrow,\u201d Dominique Baker, an associate professor of education policy at Southern Methodist University, said in a post-arguments discussion hosted by the Brookings Institution, a left-leaning think tank. \u201cI think what is too broad and what is too narrow is really a subjective question, and so ultimately, we are going to rely on nine people\u2019s definitions of a subjective question.\u201d<\/p>\n\n\n\n

The court only needs to find one plaintiff has standing to begin evaluating the legality of Biden\u2019s plan.<\/p>\n\n\n\n

2. Dissecting the meaning of \u2018waive or modify\u2019 <\/strong><\/p>\n\n\n\n

The court\u2019s decision on the legality of Biden\u2019s plan could come down to the wording of the HEROES Act of 2003, a law passed by Congress following the 9\/11 attacks.<\/p>\n\n\n\n

In particular, observers were struck by the number of questions that justices asked about two words in the act: \u201cwaive\u201d and \u201cmodify.\u201d<\/p>\n\n\n\n

\u201cThe Secretary of Education may waive <\/em>or <\/em>modify any statutory or regulatory provision applicable to the student financial assistance programs,\u201d the law reads. This provision is applicable \u201cas the Secretary deems necessary in connection with a war or other military operation or national emergency.\u201d<\/p>\n\n\n\n

The White House argues this sentence allows debt cancellation due to the pandemic, but some justices seemed skeptical.<\/p>\n\n\n\n

\u201cWhen we start thinking about the merits of the case, quite frankly, this is going to hinge a lot on how the justices view a waiver and a modification,\u201d Baker said.<\/p>\n\n\n\n

\u201cThe government has interpreted the word \u2018modify\u2019 to mean rewrite,\u201d said Sheng Li, litigation counsel at the New Civil Liberties Alliance, a conservative think tank, during a Wednesday seminar. \u201cCongress has been very careful in crafting statutes that cancel debt. And when they craft such statutes, they make it very clear that this is a statute that allows the secretary to cancel debt, and creates very explicit conditions.\u201d<\/p>\n\n\n\n

3. A strong performance by the U.S. solicitor general<\/strong><\/p>\n\n\n\n

Several experts praised U.S. Solicitor General Elizabeth Prelogar\u2019s performance arguing the back-to-back cases on behalf of the White House. Born and raised in Idaho, Prelogar has a master\u2019s in creative writing, a Harvard law degree and years of experience as a Justice Department attorney. Biden appointed her as the fourth-ranking individual at the Justice Department in 2021.<\/p>\n\n\n\n

\u201cI think the solicitor general did an excellent job standing up for borrowers, highlighting the impact of the pandemic on student loan borrowers and showing how if cancellation doesn\u2019t happen, there\u2019s going to be a wave of defaults and delinquencies,\u201d Persis Yu, deputy executive director and managing counsel of the borrower advocacy group Student Borrower Protection Center, said from the steps of the courthouse minutes after arguments concluded.<\/p>\n\n\n\n

\u201cPrelogar knocked it out of the park,\u201d University of Illinois Chicago law professor Steven Schwinn told CNBC. \u201cI do think she could have influenced or even changed the thinking of two justices, maybe more.\u201d<\/p>\n\n\n\n

4. Don\u2019t make financial decisions based on Supreme Court arguments <\/strong><\/p>\n\n\n\n

After a monthslong legal tussle over Biden\u2019s student debt cancellation plan, the oral arguments don\u2019t change the frustration felt by scores of borrowers. <\/p>\n\n\n\n

People feel like \u201cit\u2019s been this game of cat-and-mouse for so long, so why am I even getting my hopes up at this point?\u201d says Kristen Ahlenius, director of education at workplace financial wellness company Your Money Line, who frequently works with public schoolteachers and other borrowers with higher-than-average student debt burdens.<\/p>\n\n\n\n

Don\u2019t let your frustrations keep you from planning ahead. \u201cBorrowers need to take action to make sure they\u2019re in the best position possible,\u201d Yu said.<\/p>\n\n\n\n

Student debt cancellation isn\u2019t guaranteed, and there likely won\u2019t be a Supreme Court ruling until late June. Under current guidance, payments will resume<\/a> 60 days after June 30, or 60 days after the high court\u2019s decision \u2014 whichever comes first. Call your loan servicer, understand what your monthly payment could be and put aside money now if you can.<\/p>\n\n\n\n

\u201cI\u2019m seeing borrowers who are forming their own opinions based on what they heard or what they read. I am seeing some say \u2018slam dunk,\u2019 and I\u2019m seeing others saying this will get struck down,\u201d Mayotte says. \u201cSome borrowers are taking action based on what they heard today, but I think that\u2019s a mistake. I don\u2019t think we know until we know.\u201d<\/p>\n\n\n\n

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