Students Prepare for High Court Decision on Student Loan Debt

WASHINGTON — As the Supreme Court’s term comes to a close, people with high student loan debt are eagerly awaiting the justices’ decision on the Biden administration’s proposed loan forgiveness program. 

The case, Biden v. Nebraska, is an appeal from the administration after the 8th U.S. Circuit Court of Appeals enjoined the Department of Education from carrying out the program.

The underlying case dates back to August 2022, when President Biden announced his intention to cancel $20,000 in student loan debt for Pell Grant recipients and $10,000 for non-Pell Grant borrowers, if they are earning less than $125,000 as individuals or $250,000 as married couples. 

At the time the White House estimated that 43 million borrowers would benefit from the forgiveness plan and that more than 60% of those borrowers would be federal Pell Grant recipients.

State attorneys general for six states sued to block the implementation of the program, and a federal judge in Texas ruled that the program is “an unconstitutional exercise of Congress’ legislative power,” by the executive branch of government.

That ruling led to an appeal to the 8th Circuit and, eventually, an emergency appeal to the Supreme Court by the administration to try to lift the injunction.

According to the White House, the legality of the debt relief plan relies upon the HEROES Act, which was created after the Sept. 11, 2001, attacks to give the secretary of Education the ability to respond to national emergencies, such as the COVID-19 pandemic, which included the power to modify or waive student loan programs as necessary to protect students. 

Regardless of how the court rules on loan forgiveness, it is now a certainty that student loan repayments will begin in the fall.

Those payments have been on pause since President Donald Trump’s signing of the CARES Act in March 2020, which covered all borrowers with federally owned loans, and was intended to provide much needed debt relief during the coronavirus pandemic.

The pause on repayments was extended several times, but will formally come to an end in September as a result of the debt ceiling deal reached last month between the White House and congressional Republicans.

With repayments about to begin anew, students and former students are watching the Supreme Court to see just how big a hit their finances going forward are going to take.

“I have $54,263.05 in student debt,” said Kassi Rieger, a doctor of physical therapy. “Three thousand one hundred dollars of that is from my senior year of my undergraduate degree and the rest is for my doctoral degree. My husband has $111,307.55 and all of that was for his medical degree.” 

Rieger stated that she and her husband, Dr. Will Rieger, fortunately only took out federal loans, so they are both eligible for student loan debt forgiveness contingent on the program moving forward. 

“My husband is a surgical resident and doesn’t make that much money right now,” Rieger said. “The student loan forgiveness would take a huge burden off us with lower monthly payments than what is projected right now.”

Senior Colton Varvil is set to graduate from Texas A&M University this fall after taking out $30,000 in federal loans, which he hopes to have paid off by graduation — a feat that most students are not able to afford.

“From what I looked at, I would be approved of my whole loan forgiveness, $5,500,” Varvil said. “I purposely have not paid that off to see if the bill does get passed. Any loan debt relief would help any student and would for sure help me personally.” 

Although the majority of student loan debt is federal, private loans have rising prices and interest rates across the board. 

Sophomore Lily Rainey is a pre-nursing student at Stephen F. Austin State University, and private loans are the majority of how she paid for her freshman year of college. 

“For my $11,000 loan, my interest rate is 8.625%,” Rainey said. “That’s insane. I’m trying to get a degree to help save lives, but I guess it’s going to cost me an arm and a leg first.” 

According to recent data from Forbes, borrowers will owe $28,950 on average by graduation, which can take approximately 10-20 years to pay off depending on the type and amount of the loan. 

“I have a stepparent who was in their later 40s by the time they were able to pay off their student debt,” Varvil said. “No one’s really there to teach you before you take out the loans.”

While Biden’s student loan debt relief plan would relieve part of the financial burden on students, many will still be left with more debt to pay off, and new students will continue to build up more due to the current setup of the student loan system. 

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