Since 1980, the total cost of four-year public and private colleges has nearly tripled. Student loan debt has ballooned to over $1.6 trillion for more than 45 million borrowers. One-third of borrowers never attain a degree, and those who graduate do so with close to $25,000 in debt.
In order to help working and middle-class American borrowers the Biden administration in August announced a three-part plan to forgive a portion of student loans for borrowers. Part of his plan and campaign promise was to forgive $10,000 in student debt for tens of millions of borrowers. He upped the relief to $20,000 for borrowers who received a Pell Grant in college.
Biden's plan was met with legal opposition and criticism.
"At this point in our economy, we really don't need to be adding $500 billion of deficit spending for a purpose that frankly includes wealthy law students and business school graduates getting tens of thousands of dollars," said Jason Furman, Harvard economics professor and former chair of the Council of Economic Advisers, during an interview with CNBC in August.
In October, courts blocked the continuation of the plan due to lawsuits from Republicans, states and individuals.
The Supreme Court agreed to hear two of those legal challenges: One brought by six GOP-led states that argue that forgiveness will hurt the companies in their states that service federal student loans, and another involving two plaintiffs who say they've been harmed by the policy by the fact that they are partially or fully excluded from the loan forgiveness.
Biden's attorneys denied the claim that the Biden administration was overstepping its authority, laying out the White House's argument that it is acting within the law. It points to the fact that the Heroes Act of 2003 grants the U.S. secretary of education the authority to waive regulations related to student loans during national emergencies.
Federal student loan payments won't resume until the end of August, unless the litigation over the Biden administration's student loan forgiveness plan is resolved sooner.
Watch the video above to find out more about what's at stake in the student loan forgiveness battle.
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