The Supreme Court ruling against President Joe Biden's student loan forgiveness plan has ended the months-long debate of whether the plan is constitutional.
The court considered the plan's legality in two cases before it: Biden v. Nebraska, which was decided in a 6-3 vote, and Department of Education v. Brown, which was an unanimous decision. The decisions put pressure on Biden to find another way to deliver on a key commitment he made to voters during the 2020 campaign trail.
Erika Wilson, a law professor at the University of North Carolina who specializes in education law and civil rights, tells TODAY.com how the decisions impact federal student loan holders who were eligible for forgiveness under Biden's plan.
"There are still work arounds," she tells TODAY.com. "There's still a way forward."
But with Biden's plan scraped, Wilson explains what other options are available to him and what options borrowers can pursue outside of Biden. She answers many frequently asked questions about Biden's student debt plan and the Supreme Court's decision.
What was Biden's initial student loan plan?
Biden announced his initial plan to cancel up to $20,000 in August for the estimated 43 million people who are eligible, according to the Department of Education. The plan included income cutoffs to determine eligibility and was expected to cost more than $400 billion.
Why did the Supreme Court rule against this plan for student debt cancellation?
Wilson says the decision came down to the perceived scope of Biden's power.
"They agree with the idea that the President lacked the authority to do it," Wilson explains. "They basically found that the there was no authority to carry out the debt relief plan."
Wilson says it was an argument based on who can make policy, which the Supreme Court doesn't customarily decide.
"It's a form of Supreme Court legislative decision making," she says. "That was inappropriate and should not have happened.... The court probably should have never granted cert on this case."
What can Biden do now?
On July 14, the Education Department announced that it would automatically forgive student loans for more than 800,000 borrowers as a way to address administrative issues in the income-driven repayment system.
This action is expected to total $39 billion in federal student loan forgiveness.
Wilson says Biden can reconsider using executive orders, which he has repeatedly said he wouldn't do, instead calling on Congress to pass legislation.
"He's got to muster more courage to think about using executive orders to do some of it," she says. "Before he decided to go this route, there was some talk about various executive orders that he could utilize. I still think that's a viable option."
He’s previously cancelled $66 billion through other initiatives, according to CNBC.
Will my student loans still be forgiven?
According to the Department of Education, borrowers will be notified in the next few weeks about the automatic discharge of their debt.
What if I already applied for forgiveness?
Applications to Biden's initial forgiveness plan have been on hold as the administration awaited the Supreme Court's decision, according to the Department of Education. With the rejection of plan by SCOTUS, student loan repayment is expected to begin again at the end of August after having been put on pause during the Covid-19 pandemic. However, the first payments will not be due until October.
What student debt forgiveness is available now?
Aside from Biden's new plan to forgive more than 800,000 borrowers, the Education Department said the are alternative ways to find student debt forgiveness.
Under the Higher Education Act and the Department’s regulations, a borrower is "eligible for forgiveness after making 240 or 300 monthly payments—the equivalent of 20 or 25 years on an Income Driven Repayment (IDR) plan or the standard repayment plan."
However, the borrower must make the number of required payments to receive the forgiveness, which is based on when the borrower first took out the loans, the type of loans they have, and the IDR payment plan in which the borrower is enrolled.
