In less than 24 hours, the U.S. Supreme Court will hear oral arguments on President Joe Biden’s $400 billion student loan forgiveness program and consider whether the administration can advance the plan forward. 

The court agreed to hear two separate cases challenging the legality of Biden’s plan or whether Biden exceeded executive authority. After announcing the debt cancellation program in August, Republican-led states and conservative groups filed several lawsuits, alleging the plan presents financial harm and overreach of presidential powers. The following month, a Texas judge halted the program. The U.S. Department of Justice then asked the Supreme Court to reverse the decision. Now, the fate of the program — which could be particularly helpful for Black borrowers — rests in the hands of the Supreme Court. 

Already, Black borrowers owe a disproportionate amount of the $1.7 trillion in national student loan debt. They are more likely to owe more than their white counterparts and less likely to obtain wealth. Even with higher incomes and graduate degrees, many Black borrowers have struggled to pay back student loans.  

Lauri Andress is just one of the millions of Americans stuck in a cycle of debt. Since the 1970s, the professor and public policy expert has accumulated more than half a million dollars of federal and private student loan debt. She said she struggles with paying off her loans, and the stress is “mentally and emotionally destabilizing.”

“I do not believe that I will see the end of the debt in my lifetime,” Andress said. “All I can do is hope that Congress or somebody will issue loan forgiveness … because no one can pay those loans back.”

Chavis Jones, associate counsel in the educational opportunities project at the Lawyers’ Committee for Civil Rights Under Law, said the relief is crucial in helping to address the pandemic-related financial harm on Black communities from job and wage loss to additional debt.

“This is a moral and lawful response to the unprecedented health, social, and economic crisis that the COVID-19 pandemic was to Black and brown folks,” he said. “We need a remedy like this to benefit the people who are hardest hit by the pandemic.”

Although the court releases final opinions in late June or early July on the case, if a decision is unanimous, the decision may be released sooner. 

Here’s what you need to know about the challenges of Biden’s plan, the possible outcomes from the court’s decision, and its potential effects on Black borrowers.

How did Biden’s plan end up at the Supreme Court?

The proposed plan would remove $10,000 in student loan debt for borrowers who make $125,000 annually or less. Pell Grant recipients — usually students who display extreme financial need — would get $20,000. Those with undergraduate loans would also be able to cap their payments to 5% of their monthly income.

Biden justified his action, citing the Higher Education Relief Opportunities for Students Act of 2003. The HEROES Act allows the Secretary of Education to waive or grant relief of student financial aid programs to people who have suffered economic hardship in response to military or national emergencies. In August, Miguel Cardona, the secretary of education, instructed the Department of Education to implement the debt cancellation to alleviate the economic burden on borrowers, particularly those who are low-income, as a result of the pandemic. 

Then, the lawsuits began.

In Texas, Myra Brown and Alexander Taylor, two white student loan borrowers, sued the administration because they do not qualify for the debt forgiveness, according to the lawsuit. They argued they were deprived of their rights because the department didn’t adopt a comment process for the program. In November, Texas U.S. District Court Judge Mark Pittman, an appointee of former President Donald Trump, ruled that Biden’s program is “unlawful” because it circumvents congressional power. In his ruling, Pittman said that the HEROES Act doesn’t give the executive branch clear congressional authorization to create a $400 billion student loan forgiveness program. 

Another lawsuit was filed on behalf of six Republican-led states — Arkansas, Kansas, Iowa, Nebraska, Missouri, and South Carolina. The suit claimed the HEROES Act does not give the Department of Education the authority to cancel the debt and the loan cancellation could cause the states to lose tax revenue. Missouri, one of the states in the case, further argued that the debt cancellation could allow its quasi-state loan servicer, MOHELA, to suffer financial losses. 

A lower court dismissed the case in late October because the plaintiffs failed to show how anyone would be imminently harmed. A three-judge panel — all Trump appointees — from the 8th U.S. Circuit Court of Appeals reversed that decision in November, however, after determining that the Missouri loan servicer would face ongoing financial harm. The appeals court said the states’ argument, focusing on Missouri, raised “substantial questions of law” about the legality of the program. The court issued a nationwide preliminary injunction, which stopped the loan forgiveness program from moving forward.

Now, the Biden administration is asking the Supreme Court to end the injunction.

How will the Supreme Court decision affect Black borrowers?

The Supreme Court can decide whether there is a legal right to sue the Biden administration, said Rakim Brooks, public interest appellate lawyer and president of the Alliance for Justice. If there is no legal right by the challengers, both cases against the federal government will be dismissed and the student debt forgiveness plan will advance. 

However, if the Supreme Court strikes down Biden’s plan or determines it is unlawful, borrowers will restart payments. Brooks said he suspects more borrowers will stop making payments altogether or go into forbearance, meaning the borrower can stop making payments or make smaller payments for a certain time period. The loans, though, may continue to accrue interest while in forbearance. He also said the court will face backlash and advocates will look to Congress and the states to act.

“The debt crisis will just grow beyond this trillion dollar figure,” Brooks said.

The president could also take executive action to cancel debt by using other laws other than the HEROES Act, Jones said. Congress could pass a bill, but it would be unlikely to pass as GOP lawmakers oppose Biden’s plan. More than half of House Republicans and 40 senators filed briefs in the Supreme Court case to block the program.

Can I still apply for forgiveness?

The federal Department of Education is no longer accepting applications because of the injunction. For borrowers who applied for relief, the department will hold the applications.

At least 40 million borrowers would qualify for debt relief. So far, more than 26 million people applied for the loan forgiveness before Pittman, the Texas judge, issued an injunction. At least 16 million applications have been approved, according to recent data from the Department of Education. Borrowers who live in lower-income areas applied at a higher rate than individuals in wealthier neighborhoods, according to an analysis by Politico. 

What happens if the Supreme Court decides against Biden’s program?

White House officials announced on Nov. 22 the pause on payments will be extended through at least June 30. Payments will resume 60 days after the Supreme Court makes a decision. If the litigation has not been resolved by June 30, the payments will begin 60 days after that.