Protestors are rallying for student loan forgiveness as Joe Biden’s plan faces the Supreme Court test. The apex court is set to hear a Republican-led challenge to block the cancelling of debt for 40 million borrowers.
President Biden promised to forgive a portion of student loan when he was campaigning in 2020. His plan debuted last August but has been under fire since. The Supreme Court has a 6-3 conservative majority and it is almost certain that the Democrats’ attempt to forgive debt will go nowhere.
The Biden administration said that debt relief is permitted under the Higher Education Relief Opportunities for Students Act (HEROES Act), 2003. The law states that the government can provide relief to recipients of student loans when there is a “national emergency.” However, Republicans argue that the HEROES Act is not specific enough.
The plan would cancel $10,000 in federal student loan debt for those making less than $125,000 or households with less than $250,000 in income per year. Pell Grant recipients would get an additional $10,000 in debt forgiven.
The Congressional Budget Office has said the program will cost about $400 billion over the next three decades.
The National Taxpayers Union in September 2022 said that the plan could result in an average burden of $2,500 per taxpayer.
“There’s a transfer of wealth from the society at large to people who borrowed to go to college right now,” said Andrew Lautz, director of federal policy at the National Taxpayers Union.
The union’s calculation is based on a total cost of debt cancellation of more than $400 billion divided by the total number of US taxpayers, which is 158 million.