US Supreme Court to hear arguments on Biden's student loan forgiveness plan

Programme would forgive up to $20,000 in debt for millions of borrowers

The US Supreme Court building in Washington. AP

The US Supreme Court on Tuesday is scheduled to hear oral arguments on President Joe Biden's plan that would effectively wipe away billions of dollars in student loan debt for millions of borrowers.

The White House expressed confidence that it would win the case, arguing it would “give a little breathing room” to millions of people.

“We feel very confident in our legal process,” White House Press Secretary Karine Jean-Pierre told reporters last week.

Arguments are set to begin at 10am EST.

What is Biden's student loan forgiveness programme?

Announced in August of last year, Mr Biden's student loan forgiveness programme would eliminate $10,000 in debt for borrowers who earn less than $125,000 annually.

Those who received Pell Grants — federal grants handed to low-income university students — would be eligible to have $20,000 in student loan debts forgiven.

Mr Biden, who ran on the policy during his presidential campaign, hailed the programme as a “game-changer”.

The White House said 43 million people would benefit from the plan.

Some critics of the plan argue it is unfair to those who have already paid off their student loan debt, but Mr Biden said the plan is an example of how the federal government can work for the people.

About 26 million people applied for the programme before the Department of Education stopped accepting applications.

The Biden administration has leaned the legality of the programme on a 2003 law, known as the Heroes Act, which allows the education secretary to “waive or modify” federal loans in the event of a national emergency.

How did student loan forgiveness programme wind up in the Supreme Court?

The Supreme Court is hearing two challenges to the programme.

The first involves six Republican-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — that are suing the Biden administration over executive overreach.

In the lawsuit, Arkansas's attorney general says Mr Biden does not have the authority to override the authority of the Education Department to collect student loans.

A lower court dismissed the lawsuit, saying the six states in question were not harmed by the programme. But a federal appellate court put the programme on hold, at which point the Supreme Court decided to hear the case.

The second challenge involves two university students. One, Myra Brown, is ineligible because her loans are privately held. The other, Alexander Brown, was only eligible for $10,000 because he did not receive a Pell Grant.

A Texas federal judge sided with the students who argued the president did not receive authorisation from Congress to enact the programme.

Agencies contributed to this report