The student-debt squeeze is still on

President Biden himself has expressed skepticism about the president’s legal authority to forgive student debt through executive action. So when Biden did just that in August, he must have known legal challenges would be inevitable—and might eventually kill his plan.

That script is playing out. After Biden announced his plan to forgive up to $20,000 in student debt, objectors sued to halt the plan. Two federal courts complied, pending appeals, and on Nov. 18 the Biden administration asked the Supreme Court to hear the matter on a fast-track basis. The Supreme Court will soon decide whether to hear the case. The Biden administration says 26 million student borrowers have already applied for relief, with another 14 million eligible. Now, they're all waiting on the Supreme Court.

On Nov. 22, Biden announced that the government will extend a pause on student loan repayments as the legal battle shakes out. Congress first enacted a pause on repayments during the COVID outbreak in 2020. President Trump and then President Biden extended the pause several times. In August, when Biden announced his debt forgiveness plan, he also said the pause would end in December, with payments resuming next year. But now Biden says the pause will extend until the end of June 2023. That probably indicates Biden's expectation that his debt-relief plan will be tied up at least until then.

The Supreme Court doesn't have to take the case, but it probably will, and render a verdict by the time its term ends in early summer. But it could just as easily strike down Biden's debt-forgiveness plan as uphold it. The Biden administration argues that a 2003 law called the HEROES Act gives the Education Secretary broad powers to modify the federal student-loan program during a national emergency, and that the COVID pandemic was and is a national emergency. Some legal experts think the Supreme Court will reject that logic and force the Biden administration to try a different approach.

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The Court leans conservative by a 6-3 margin, and if predilection factors into a decision, that could also foretell a loss for Biden and millions of borrowers awaiting relief. A slight majority of Americans support student debt relief, but 81% of Republicans oppose it, according to a September Quinnipiac poll. If 81% of the conservative Justices voted the Biden plan down, that would be enough to sink it. And the Court’s overturning of the Roe v. Wade abortion protections over the summer shows the conservative majority has no fear of unpopular decisions that generate political blowback.

Biden has said before that his preferred route for student-debt relief is for Congress to do it by passing a law. That might face court challenges too, but the legal basis would be much clearer if Congress clarified its own intentions in the HEROES Act or established a new basis for debt forgiveness. But Democrats couldn’t get that done during the last two years, when they controlled both houses of Congress, and it’s not on the agenda during the lame duck session that runs through the end of the year.

If the Supreme Court upends the Biden relief plan, Biden could try again with a different legal justification or another type of relief. But that, too, could face legal challenges. Republicans don’t support debt relief, and they’ll control the House of Representatives for the next two years. So there’s no chance Congress will bail out Biden’s plan with legislative action through 2024.

That could make student-debt relief a major campaign issue in the 2024 elections. Biden campaigned on debt relief in 2020, but the issue would be more potent in 2024 if it’s only an issue because a Republican-dominated high court killed Biden’s plan. On a party-wide basis, Democrats could campaign on a pledge of doing by law what Biden tried but failed to do by executive action.

That doesn’t mean Democrats won't ever be able to pass a law forgiving student debt. First, they’d have to win both houses of Congress and the White House in 2024, which happens to be a year when Democrats have to defend a lot more Senate seats than Republicans do. To get around the filibuster, Democrats would need 60 votes in the Senate (where they only have 51 votes now), or be willing to use the arcane reconciliation process to bypass the filibuster. If Democrats couldn’t muster the votes for debt forgiveness this year, could they do it in the future? They’re probably hoping they never have to find out.

Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman

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