On Tuesday, February 28, the U.S. Supreme Court will hear two cases—Department of Education v. Brown and Biden v. Nebraska—under expedited review procedures. At stake is whether the Biden administration’s targeted student loan forgiveness will be permitted to go forward. The student loan debt relief action, designed by the Biden administration to redress severe economic hardship of millions of student loan borrowers caused by the COVID-19 pandemic, represents the single largest, most comprehensive loan forgiveness initiative in the nation’s history. Below is a brief explainer about the cases.

What action by the Biden administration is being contested in court?

On August 24, 2022 the Biden administration announced it would provide $10,000 in forgiveness to federal student loan borrowers who are not Pell-Grant recipients, and $20,000 in debt cancellation to those who are also Pell Grant recipients. Such borrowers are only eligible if their 2020 or 2021 tax year income is less than $125,000 (or less than $250,000 for married couples). At the urging of The Century Foundation and other organizations, the debt cancellation plan includes individuals holding Parent PLUS loans.

How many borrowers applied for debt cancellation?

According to the U.S. Department of Education, some 26 million student loan borrowers in all fifty states applied or were automatically eligible, and over 16 million had their applications fully approved. Because of the intervention of lower courts, the department paused accepting new applications pending action by the Supreme Court. The department estimates that some 40 million borrowers are eligible for the debt cancellation program.

What do we know about the borrowers who applied for debt cancellation?

According to the Department of Education, some 90 percent of debt cancellation benefits will go to borrowers earning less than $75,000 a year. According to an analysis by Politico, some 98 percent of those who applied for loan cancellation live in zip codes with an average income of under $75,000, and some two-thirds of such applicants reside in zip codes with an average income below $40,000. According to the Census Bureau, the Biden action would eliminate student loan debt for almost one third of student loan borrowers.

Why did President Biden take this action?

President Biden took the action because many families with student loans were severely affected by the pandemic. Specifically, the administration took action to ensure borrowers were not left in a “worse position financially, as a result of the COVID-19 pandemic,” and cited the elevated risk of delinquency and default of student loans after a period of forbearance. The administration noted that borrowers making under $125,000 were “disproportionately likely to experience material hardship due to the pandemic, including food insecurity and difficulty making utility, rent and mortgage payments.” Parent Plus borrowers were also affected by the pandemic, and already faced serious challenges paying back loans. For example, TCF reported that the share of Black Parent PLUS borrowers who have so few financial resources (as defined by the Department of Education) that they can’t afford to help their children pay any college tuition or expenses rose from 15 percent in 2008 to 42 percent in 2018, and that the share for similar Latino/a Parent PLUS borrowers is also high, exceeding 25 percent.

What is the major legal issue in dispute?

One of the main issues in the case is whether the Biden administration had the authority to make such sweeping waiver/modifications of student loans through administration action. The administration argues that under the HEROES Act of 2003, Congress specifically authorized the Department of Education to “waive or modify” any student financial assistance provision if borrowers “suffered direct economic hardship” as a result of a “national emergency” declared by the President of the United States (both Presidents Trump and Biden made such declarations regarding the pandemic). The HEROES language makes clear the department is authorized to make waivers for large categories of borrowers, and specifically does not require a case-by-case review of individual applicants for a waiver. Legislative history is also on the side of the Biden administration. For example, the former chair of the U.S. House Education and Labor Committee, Congressman George Miller, who was one of the chief architects of the 2003 HEROES Act, filed an Amicus Curiae in support of the Biden loan forgiveness action.

Challengers to the Biden action—the states of Alabama, Alaska, Arizona, Florida, Georgia, Indiana, Louisiana, Mississippi, Montana, New Hampshire, North Dakota, Ohio, Oklahoma, Texas, Utah, West Virginia, and Wyoming—argue, among other things, that the Department of Education exceeded the Higher Education Act’s statutory authority, claiming it created a new forgiveness program that was not authorized by Congress and is too sweeping to be a “waiver or modification” of existing loans. Other legal briefs, such as those filed separately by a group of higher education policy experts, the American Federation of Teachers, and eleven distinguished law professors strongly support the Biden administration’s legal rationale.

When will borrowers know if they will receive loan forgiveness?

During oral arguments, we may be able to infer where some Justices stand based on their questions. However, the formal opinions of the Supreme Court are usually handed down in late June to early July. It is possible that the Court could move quicker in this case, given that it accepted the cases under expedited procedures. It could order the lower courts to vacate or modify the pending injunction, which would allow the Department of Education’s loan forgiveness waiver to continue.

What is the likely outcome of the case?

A more ideologically balanced Supreme Court would make this case an easier call, especially given the broad discretion the HEROES Act gives the Department of Education to waive or modify student financial aid in national emergencies. Further, the Department of Education has used the HEROES Act to provide categorical relief on a number of occasions, including action during the pandemic by then-secretary Betsy DeVos to pause repayment of loans and suspend interest accrual on such loans, at a cost to the federal government of over $100 billion. However, it is possible that this bold administration action—estimated to cost the federal government some $400 billion—will be seen by some conservative Justices as an overreach of executive power.