In the next few days, the US Supreme Court is expected to issue its decision on legal challenges to President Joe Biden's student debt forgiveness program, which would cancel up to $20,000 in federal loans for eligible borrowers.
Depending on its ruling, the plan could begin in earnest or be struck down.
Education debt in the US topped $1.75 trillion in 2022 -- the second largest form of consumer debt after home mortgages. The White House has said its plan could wipe out the entire balance for almost half of the 45 million Americans still paying off education loans.
"This means people can start to finally crawl out from under that mountain of debt," Biden said in announcing the program.
Some 47% of Americans support Biden's plan, including 83% of education loan borrowers, according to a May 10 poll from USA Today/Ipsos. That's compared to 41% who oppose the plan and 12% who are undecided.
Here's what to know about the ruling, including when it's expected, the questions at the core of the legal challenge and what the White House could do if its plan is struck down.
For more on student loans, learn when payments and interest resume and how to find out who your student loan servicer is.
When will the Supreme Court rule on student loan debt forgiveness?
The Supreme Court heard oral arguments in the two challenges on Feb. 28, 2023. Thursday, June 29, is the last official decision day before summer recess, so it's possible a ruling could be announced then.
But with more than a half-dozen cases left on the docket, the court may extend its term into next week. Chief Justice John Roberts has not confirmed that Thursday is the final day of the current session.
Opinions are posted as they are released on the Supreme Court website, beginning at 10 a.m on decision days. ET. You can also get real-time updates on SCOTUSBlog.
What are the cases the Supreme Court is ruling on?
The Biden administration argues that its debt forgiveness plan falls under the 2003 Higher Education Relief Opportunities for Students Act, which grants the Department of Education the power to waive student loan repayments for those impacted by "a war or other military operation or national emergency."
But Republicans disagree. John Boehner, John Kline and Buck McKeon -- former House members who helped draft the HEROES Act -- insist "Congress never intended anything like the loan cancellation effort underway here," according to an amicus brief they filed with the Supreme Court.
Two lawsuits have made their way to the nation's top court, both of which argue Education Secretary Miguel Cardona overstepped his authority in approving the debt erasure.
Biden v. Nebraska: On Sept. 29, 2022, Republican attorneys general in six states -- Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina -- filed a challenge that argued the forgiveness program could harm state tax revenues and diminish investments tied to student loans.
Department of Education v. Brown: On Oct. 10, 2022, the Job Creators Network Foundation filed a separate lawsuit in Texas on behalf of two student loan borrowers, Myra Brown and Alexander Taylor. The plaintiffs argue the Biden administration failed to allow for the traditional "notice and comment" period when it rolled out its debt-forgiveness plan.
Until the justices issue their ruling, an injunction is in place blocking the debt forgiveness plan from moving forward.
How could the Supreme Court rule on student debt?
In both cases, the court must determine whether the challengers have standing, or the right to sue, and whether their complaints have merit.
If the Supreme Court rules on standing: The Biden administration maintains the plaintiffs in both cases can't prove they are being harmed by the loan forgiveness plan or that the judiciary can remedy the situation. If the Supreme Court sides with the White House, the cases would be dismissed.
The door would be open for other challenges, but student loan expert Mark Kantrowitz said, it would be hard to reverse course and reinstate borrowers' loan debts after the Department of Education began processing applications.
"They've already approved 16 million of the 26 million applications they've received," Kantrowitz told CNET. "All that's left to do is notify loan servicers -- and implementation normally takes one to two weeks. It won't be the day of the ruling, but it will happen quickly."
If the Supreme Court rules on merit: If the justices grant the challengers standing in either case, they will then dive into the question of whether the Department of Education is within its rights to erase millions of Americans' student loan debts.
Many experts say it doesn't look good for the federal government's plan.
"If they rule on the merits, I think there's more than a 50-50 chance that the court will rule against the Biden administration," Kantrowitz said. "It really is an expansive reading of the law that goes beyond any precedent or established authority."
University of Illinois law professor Steven Schwinn also thinks the plan's chances are slim, telling CNBC,. "I predict the court will rule 6-3 against it, along conventional ideological lines."
What happens if the Supreme Court strikes down Biden's plan?
Though a ruling against the plan would be a major setback, the White House could pursue other avenues toward student loan forgiveness, including authorizing it using a different legal authority.
The Higher Education Act of 1965 established federal loans, grants and other programs laying the groundwork for the modern college financial aid system. It also grants the Department of Education broad authority to release borrowers from federal student loans, and unlike the HEROES Act, it isn't dependent on a national emergency.
Though it's never been used on this scale, about 615,000 borrowers were approved for $42 billion in loan forgiveness from 2021 to 2023, under a provision of the HEA known as the Public Service Loan Forgiveness Program.
Of course, using the HEA as a basis for widespread education debt forgiveness would likely spark a new set of legal challenges that could once again go before the Supreme Court.
When do I have to start repaying my student loans?
Federal student loan payments and interest have been paused since the beginning of the pandemic, more than three years ago.
After numerous The White House has confirmed payments and interest will resume The court has yet to rule, but a provision in the debt ceiling deal passed by Congress
cements the June 30 deadline and prevents any further pauses without congressional approval.
The Department of Education has confirmed that interest on student loans will resume on Sept. 1, 2023, and payments will be due starting in October.
For more on student loans, find out when payments will resume and which banks have the best personal loans right now.
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