On borrowed time

There are two questions about President Biden’s $400 billion student loan forgiveness. Question one is whether it’s the right policy to lift what can be crushing debt on people trying to get started on careers after college. The answer is easy: Yes. The other question, before the nine justices of the U.S. Supreme Court today, is does the president (actually the secretary of education, Miguel Cardona) have the authority to cancel the debt for student borrowers? That’s a tougher call and the law seems against Biden. No matter how beneficial and fair relief would be, the justices aren’t going to allow it if they think Biden went too far and that such action is exclusively the prerogative of Congress.

On the merits, the limited college loan forgiveness, for people earning less than $125,000 per year, makes sense. It helps those who need help (unlike well-to-do lawyers and bankers carrying education debt but with hefty paychecks) and the amount of assistance per person is capped (at $10,000 a person in general and $20,000 for anyone with a Pell Grant). Those limits are better than the earlier proposed blanket forgiveness of all education debts or even a high cap of $50,000.

About 90% of the 45 million student loan carriers would qualify for some aid under the Biden/ Cardona plan, and 18 million at the lower end would have a clean slate. But for now, no one has had a penny forgiven, as the program has been frozen pending the courts. Of course, all federal student loan payments have been paused going on three years, since COVID arrived in March 2020, so borrowers have gotten some respite.

The White House says that their power under the COVID emergency grants the authority to act without Congress. The court may disagree, and Biden has said that the emergency will expire on May 11. Biden’s best chance may be that the justices decide that the wrong parties are bringing the lawsuit. If so, the program could survive and begin the needed relief.