Student Loans Head Back to the Supreme Court
The U.S. Supreme Court announced on Monday that it will hear oral arguments in May 2026 on the legality of the Biden-era student loan forgiveness plan that was subsequently modified and re-issued by the current administration. The case, Kansas v. Department of Education, challenges the government's authority to cancel up to $20,000 in federal student loan debt per borrower.
The stakes are enormous: approximately 25 million borrowers stand to benefit from the plan, which would cancel a combined $430 billion in student debt. The case marks the second time in three years that student loan forgiveness has reached the nation's highest court.
Background: A Turbulent Legal History
The original Biden student loan forgiveness plan was struck down by the Supreme Court in June 2023 in Biden v. Nebraska, with the 6-3 majority ruling that the administration had overstepped its authority under the HEROES Act. In response, the Department of Education pursued a revised approach using its authority under the Higher Education Act (HEA), which gives the Secretary of Education broad power to "compromise, waive, or release" federal student loan obligations.
The revised plan, finalized in late 2025, takes a more targeted approach:
- $20,000 in forgiveness for borrowers with original loan balances of $12,000 or less who have been in repayment for at least 10 years
- $10,000 in forgiveness for borrowers whose loan balances have grown due to unpaid interest (affecting an estimated 23 million people)
- Full forgiveness for borrowers who have been in repayment for 25+ years on undergraduate loans or 30+ years on graduate loans
Legal Arguments
The plaintiffs — a coalition of six states led by Kansas — argue that the Department of Education is once again attempting to use executive authority to implement a policy that should require Congressional action. They contend that the HEA's "compromise and waive" language was intended for individual loan adjustments, not mass cancellation affecting millions of borrowers and hundreds of billions of dollars.
"The administration is trying to do through the Higher Education Act what the Supreme Court already said it cannot do through the HEROES Act. The constitutional principle is the same: decisions of this magnitude require Congress," argued Kansas Attorney General Kris Kobach.
The Department of Education counters that the HEA provides explicit statutory authority for the Secretary to cancel student loan obligations, and that the revised plan is well within the scope of that authority. Unlike the HEROES Act approach, which relied on emergency powers, the HEA-based plan uses longstanding regulatory authority that has been exercised for decades on a smaller scale.
What Are the Possible Outcomes?
Legal scholars identify three likely scenarios:
- Plan upheld (30% probability): The Court rules that the HEA provides sufficient authority. Forgiveness proceeds for 25 million borrowers.
- Plan struck down (45% probability): The Court applies the "major questions doctrine" again, ruling that mass cancellation requires explicit Congressional authorization.
- Narrow ruling (25% probability): The Court upholds some components (e.g., forgiveness for long-term repayers) while striking down others (e.g., interest-based relief), creating a partial victory.
Impact on Borrowers
While the case is pending, loan forgiveness applications are frozen. Borrowers who had applied and were awaiting processing will not receive relief until the Court issues its decision, expected by late June 2026. Monthly payments remain due under existing repayment plans.
For the 25 million borrowers whose financial futures hang in the balance, the case represents more than a legal technicality — it is about whether the crushing weight of student debt will be lifted or whether they will continue making payments on loans that many have been repaying for a decade or more.
The Broader Political Context
Student loan forgiveness remains a deeply polarizing issue. Supporters argue that the $1.77 trillion in outstanding student debt is a drag on the economy, preventing young Americans from buying homes, starting businesses, and building wealth. Opponents counter that blanket forgiveness is unfair to those who did not attend college, those who already repaid their loans, and those who chose less expensive educational paths.
Regardless of the Court's decision, the issue is certain to play a major role in the 2026 midterm elections, with both parties using the outcome to energize their respective bases.
