Legal experts are predicting that the The Supreme Court will strike down the Biden administration’s plan to cancel $400 billion in student loan debt, according to a published report, which could potentially lead to increased delinquency and default rates.
Experts predict the six conservative justices will agree that the Biden administration is exceeding its authority by trying to cancel up to $20,000 in student debt for tens of millions of borrowers. “The Supreme Court is an incredibly ideological and partisan institution in 2023 — perhaps more so than at any other point in American history,” said Prof. Paul Collins, Jr. from the University of Massachusetts.
The administration cites the Heroes Act of 2003 as providing the necessary authority for the debt cancellation, while the plaintiffs, including six GOP-led states, argue that the Act permits narrower forms of relief. Higher education expert Mark Kantrowitz points out the inconsistencies in the administration’s argument, asking, “For example, if it was an emergency, why wait three years to provide the forgiveness? Why present it in a political framework, as fulfilling a campaign promise?”
If the court rules against the debt cancellation, the resumption of student loan payments could lead to skyrocketing delinquency and default rates after the economic damage caused by the COVID-19 pandemic — the double-edge of the sword in this situation. If individuals have to not only start repaying their student loan debt, but repay all of it, that will likely leave those people with less money for their other financial obligations, including outstanding debts.