good afternoon everyone thank you so much for being here at the American Enterprise Institute Michael Brickman I'm an adjunct fellow here at AI thank you all for being here in person and thank you to those of you watching online uh and thank you to our staff in particular Shan Duan and Caitlin abman for making this event happen uh really appreciate all the hard work and uh for being here today we are uh just hours away from getting a decision there are 1.8 nearly 1.8 trillion dollar uh in student loan debt and we're soon tomorrow morning most likely going to find out whether hundreds of billions of those dollars are going to be forgiven by taxpayers on the campaign Trail Joe Biden promised to forgive a minimum of $10,000 per borrower and maybe as a result on Election Day 61% of those with at least a bachelor's degree supported him which was Four Points better than Hillary Clinton did 67% with a gra uh of those with a graduate degree supported Biden while his opponent received 56% support from voters with a high school diploma or less when he took office he promptly asked the Democratic majorities in the Senate and the house to act on student loan forgiveness and they did not and so instead he invoked emergency Authority Under the heroes Act of 2003 which was a post 911 law which gave authority to the Secretary of Education to quote wave or modify any statutory or regulatory provision applicable to the student financial assistance programs under title four of the higher education act as the secretary deems necessary in connection with a war or other military operation or a national emergency and of course in this case the National Emergency uh was the co pandemic as a result $10,000 in relief was granted to most students and up to $20,000 for borrowers who had received a pel grant the cost depends on who you ask the administration's own estimates put it around $300 billion but other estimates put it much higher uh including up uh to nearly $1 trillion according to uh research upen there were immediate challenges and honestly it seemed unlikely that those challenges would Prevail seemed unlikely they'd even be granted standing to bring the case much less to uh decide the case on the merits but here we are the Supreme Court will decide on two cases Biden versus Nebraska and Department of Education versus brown first on whether any of the plaintiffs have standing to bring the case among the Six States and the two borrowers and on the merits whether the department has exceeded its Authority and whether the policy itself was adopted in the appropriate way given that Congress did not act Congress has subsequently acted not to forgive loans but to reject the administration's policy Senate recently voted 5246 including uh votes from Democrats Joe mansion and John tester along with former Democrat current independent Christen Cinema from Ariz Iona the house likewise voted 208 to 203 including a couple of Democrats joining Republicans to reject the Biden administration's loan forgiveness plan however that bill was since vetoed by the president and lacked the two-thirds majority necessary to overcome the veto the implications of this case are wide reaching not just in dollars and not just for the loan forgiveness itself there are many other cases that relate to loans that are still in play today today according to my colleague Nat malchus while all of this has been going on nearly $300 billion do has already been spent since the beginning of the pandemic on the loan repayment pause which is costing about5 billion per month changes to borrow defense changes to Public service loan forgiveness and other policies already it looks like the pause will end this fall but just today the department indicated that despite a congressional agreement they might try to use executive Authority again to Shield students from defaulting meanwhile perhaps the biggest policy is IDR could itself have hundreds of billions of dollars of impact and that number could go up substantially if loans are not forgiven after the Supreme Court rules we'll be watching all those policies we're going to talk with our panel about the implications and most importantly whether you agree with this policy or not the fact is there are 26 million people who are eagerly awaiting this decision because it affects their personal finances and so we want to talk about the policy but also the people involved here finally one more plug we want to not just talk about the policies that we uh might not like whether it's loan forgiveness or any others but also we want to be for uh a number of policies to not just uh address the debt issue but address holistically student loans higher education and Pathways to good careers whether that involves college or anything else and so we've been working with uh higher higher education strategy groups Emanuel and many others have uh participated in those groups over the past several months and we will be releasing some new ideas and we're going to try to do it in a new and interesting way where people can interact with those policies and choose the policies they think are best for them so stay tuned on that for now I'm going to join the panel and I'd like to introduce them uh one by one so first of all thank you for joining us here today uh I'm going to start uh down in thean Russ Ryan is senior litigation council at the new civil civil liberties Alliance a nonpartisan nonprofit Civil Rights group that works to protect constitutional freedoms he has a particular interest in the Securities and Exchange Commission related issues and is currently involved in another student loan case in Kansas which we will be sure to ask him about he was partner at the law firm King and Spalding for 15 years and taught at uh the law school at George Mason University right here in the DC area and uh we appreciate you being here glad to be here uh Emanuel gillery is the senior director of government relations at the American Council on education AC is often seen as the voice of the nation's colleges and universities and they represent about 1,700 of them including two in fouryear both public and private I've been fortunate to know Emanuel for a long time going back to my time at the department of Ed and in his time in Prior roles at niku which represents P private colleges universities uncf and on the hill where he worked on the committee on education and the workforce he was recognized as one of the Hill's top lobbyists in 2020 and 2021 and Emanuel we appreciate you being here as well and last but not least lene Ericson is senior vice president for social policy education and politics all of those things at Third Way and which is a think tank that Champions modern center-left ideas lene writes extensively on education issues she is direct honest and forceful in her written comments to the Department of AD which I can tell you with certainty because I was on the receiving end of a lot of those when I was at the department and uh you know sometimes we agree sometimes not but I think what L tries to do which I really appreciate is before the kind of bipartisanship that is about doing what's right not just the little bit of sliver where both parties can agree so I like that we need more of that in Washington and L I appreciate you being here that was the nicest intro I think I've ever had thank you well great off to a good start with that uh would love to start with you uh Len and I'm just going to go and ask each of you this question we had a big case today on higher education we're expected to have uh a big case on these two uh student loan uh challenges what is going to happen what is going to be the implications for student loans High Ed in general what do you expect well first of all I want to say that I was the one even in our prep call that said it was going to happen Friday because I've known this for a long time I've been a court Watcher and a Judicial uh nominees um veter as my first job ever in DC so very familiar with the court and they like to run away after something that's about to cause protests so I was like they're going to do it right before the weekend and get out of town so uh I do think it will you know be tomorrow morning and and kind of thought it would be the whole time um and I think of tomorrow morning's decision really as um kind of the the season finale of the first season of this drama and not the series finale I think we're going to see a lot more to come um both on the hill and from the Department no matter how the court rules my guest says a um you know person that went to law school a long time but hasn't done real law in a very long time too uh is that they're going to strike it down I think they um if they weren't going to strike it down they would have done it earlier because then they wouldn't have wanted to run out of town so you know I think that that's what we're about to see and so for um you know for the left that has made this really their CA the lab they number one ask of the Biden Administration they're not going to be satisfied with this they're going to go back and say do it again do it under a different Authority go back cancel it under settlement and compromise which is the other legal Authority that folks had talked about for a long time and then we kind of surprised was switched out at the end um in the way that the administration tried to go they've already said as much they've sent as much to their email lists everybody knows that's going to happen um if for some reason the cancellation does stand there's a lot of other lawsuits in the works I can to others to talk about that um so it won't be to the end of the story either um but you referenced all the things that need to happen now on student loans and um you know it's really it's it's really the borrowers that are going to be in a pickle now because I had someone at my office say to me the other day you know I paid down a bunch of my loans during the payment pause um but then I went back and got that money back out and now it's sitting in a savings account do you think I should spend it and I was like no don't spend it but that person works at a think t tank in Washington DC I don't think that most people had the the foresight or or you know were educated on the fact that that was really what they were going to have to do they were going to have to pay those loans back again and I really worry about what's going to happen to borrowers who thought their balance was going to be down 10 or $20,000 and now it's like just kidding that's that's not the way we should be making policy it's very damaging to people um and it's worrisome because then add on to that obviously we're going to ask people to start paying down their student loan payments again or for the first time for many people who've never paid down loans because they've been just out of school in the last three years um we don't know where they live their servicers don't have enough staff we're not properly funding the um you know the FSA to um find them and tell them where to pay their loans um so I just think like we're we're headed for disaster if we don't get ahead of this and really say we need to clearly communicate to borrowers what is going to come what is required of them um and we just frankly have haven't done that yet and and you know if we're going to try to put um starting the payments plus a new income based Ro payment plan plus you know you thought you had these loans forgiven but now you didn't that's a lot of change all at once um and I think those of us who think about this in DC really need to get ahead of it and help people kind of sort through how do I make sense of all that and not end up in a place where I have no idea where even to send my check to pay my my student loan Emanuel what do you think well um to build off how do you follow that but I I think I would agree with my colleague in a sense that I believe that the Supreme Court will not allow this to go through and I think that this has been a fear that we've had from the very beginning and it goes back to when Senator Warren was championing the fact that we need to forgive $50,000 in student loan debt and Chuck Schumer got involved and they had Harvard put out a report about why and using the authority in the haa to be the basis at that particular point in time and then there's there was that political push that the Biden administration had but because of that political push we saw the we felt and pretty much saw the Biden Administration go back and forth with uh we don't know if we can do 50,000 for everybody we kind of need to Target it a little bit more but there was that push internally within the caucus to no we need to go as far reaching as we possibly can and so the proposal that they came out with to be honest we were we were happy that it wasn't you know blanket all forgiveness for everyone that they try to at least Target it a little bit and put some sort of rationale to it but obviously using the heroes act 2003 which by the way that bill when it was first passed in August of 2003 was a republican it was led by a Republican John Klein to be exact and it was bipartisan and then when it was extended in 2005 it was again led by John Klein and it was bipartisan ever um in 2009 or 200 N I believe 2 years after when that bill was put forth by the Democrats that was not at all bipartisan even though George Bush happened to approve the bill but that was during a time when Democrats had the majority in the house and the Senate and so when we even think about heroes 2003 why that's even a thing September 11th happened 2001 Congress was trying to figure out what do we do and how do we do it and how do we best serve Americans and so that was a way to give the secretary Authority and flexibility to just act quickly because when that attack happened there was really not a clear process in place for the secretary to be able to move swiftly in a way as such but now there's obviously been back and forth arguments about well do we really believe section two of the heroes act 2003 really gives the secretary the ability to forgive the loans now let's think back to the Trump Administration so obviously car happened March 2020 and then suspension of student loan payments happened right but in 2021 Betsy DeVos had resigned and after that there was a memorandum that came out basically saying that the administration does not have the authority to do this um they cited the Constitution uh article one as as an example and also kind of try to you know in some ways Stick it to the income Administration but at the same time when the Biden Administration came in they of course rescinded that and said we do while we agree that this the analysis of the heroes Act is correct we don't agree with the interpretation and so here we have um what we always feared a situation where we our most our biggest concern as Len mentioned are the students the students are being jerked around you know back and forth hey you're going to have to start repaying this is the official cut off date oh no we're going to extend it a little bit longer if we recall back in 2022 um apparently December 31st 2022 was going to be the final date apparently um and they were I think they actually went ahead and notified borrowers in 2022 uh beginning like late summer early fall that hey we got a ramp up repayments are about to start back and then it was extended once again and so as Len predicted I do believe that tomorrow will be the date that we find out that it's not going to move forward and then what does that mean for you know those little more than 25 million borrowers who have submitted their applications those 16 million borrowers who have been approved you know and how then how then do they begin to prepare to repay but as Michael mentioned in the beginning statements just this morning we we are learning that the department actually is wanting to build in a three-month grace period to this new plan plan that they now I think they want to dub the save plan which before there wasn't really a name for it they was just amending the revised or revising the repay plan that we have now um and so I think that that also stems though from the remarks made in the or arguments so for those of you that actually listened to the or arguments in February um the general arguing on behalf of the Biden Administration actually articulated the fact that you know she believes that there's going to be a lot of delinquencies you know if if there's no Grace or no nothing given to these students when they have to start repaying their loans and so we could be in a situation where yet again there's an indefinite series of extensions not on the need to pay because interest is going to keep accruing but SE other consequences so let me go ahead to uh to Russ I'd love to hear your take as somebody who's watching these loan cases in general you're involved in some of them yourself you've you've watched the court a long time what is going to happen tomorrow from your perspective I tend to agree with Len and Emanuel that if the court reaches the merits of the case they will strike it down I think there's at least a majority of the justices who um don't believe this is a lawful exercise under the heroes act however they first have to find that at least one of these litigants has standing and and that I think is a closer question because if if nobody has standing that goes to the Court's Jurisdiction and the court cannot address the merits if it does not find that it has jurisdiction so I see sort of three potential outcomes one is they find no standing and then they do not address the merits of the policy and it presumably goes forward unless and until someone withstanding comes in to challenge it again and we can get to that later because we think we have someone in the wings on that but uh even if there's a a decision of no standing I do think you may see some concurring opinions or dissenting opinions that do address the merits but they won't they wouldn't be precedential they just be sort of venting and hoping that lower courts will take the cues if this starts percolating up through this the courts again um the second is they could find standing and declare it unlawful and then as Len and Emanuel said I don't think that's necessarily the end of it um this Administration has pretty much shown that it doesn't always take no for an answer from the courts um we've seen it before with the uh the rent moratorium issue that seemed to come back a second or third time um and the third the third chance is they find standing but a majority of the Court says close question but we think it's within the Secretary of education's discretion to do what he did in this situation and again that's that I think would be sort of the a huge win for the administration and I'm not sure there are many more aages to fight it at that point if if the court sort of definitively holds this is a lawful interpretation of the statute I think that third scenario is pretty unlikely um so that's sort of where I come out with it but just to follow up on something Emanuel said um I think there were at least two occasions where the payment pause was declared last and final and then as the date approached oh never mind you know we're gonna extend it again so it's been extended something like eight times I think now and there's litigation over that as well um so um you know there's a lot that still needs to be figured out here no matter what happens tomorrow but I think whatever happens tomorrow it's going to um it's going to move the ball in One Direction or another substantially but probably not in this bruss I'm G stay with you for a minute let's just zoom out for a minute you know I didn't go to law school but I did graduate from fourth grade and in fourth grade I learned that there are three branches of government separation of powers checks and balances and just from that perspective it seems like you have this situation where Congress put this law in place questionable interpretation of what they really meant the Department's Powers were Department want to Hadad and acted uh Congress has since essentially rebuked them and said we want this pause to stop and yet the president can just veto them and a simple majority in both houses is not enough and the third branch of government uh the courts may as you said uh not be able to decide the merits of the case at all because of this standing question and so just those of us who are a little confused here help us out how how does something like that happen where it's essentially one branch of government acting and it seems pretty clear the other two branches of government don't like it and they may not be able to do anything about it well I I have this memory that at one point even uh when Nancy Pelosi was speaker she I think uh by Biden was already president and she basically turned to him and said you can't do this you need us to when that happened to be clear she turned to the press and said he doesn't have the authority but so it's not you know I kind of view it as a a bipartisan understanding that if we're really being honest this is something congress should be doing it should not be if anyone does it um and I really have no official position on that but if it's going to be done it should be done by our elected representatives and one of the reasons why it's so hard to find someone with standing on something like this is that exactly a hundred years ago this month the Supreme Court said that in general taxpayers no matter how much they're upset about the way their money is being spent have no standing to challenge government action it's a case called frothingham against melon and just by coincidence it was decided early in June 1923 and it's it stood ever since pretty much and you know if I think if taxpayers were allowed to sue over these things sure you'd have a lot more litigation but you'd have no shortage of people with legitimate standing because I mean this is so much money that the average taxpayer is going to be hit up for hundreds if not thousands of dollars and to me that ought to be enough of an injury to get you in court to plead your case but we don't have that and so in this situation I think you know PE people who want to get things done through administrative action are pretty clever and they came up with what I think they believe is the Perfect Crime I was trilon do Heist from the public Fisk and nobody can stop it can they get away with it that's the question we'll find out tomorrow real quick because I I want to get to Emanuel and lene but this question of tax taxation could a future Republican president look at the tax code and say okay my voters are about here I'm just not going to audit people who uh do this or I'm not going to look at this section of the tax code I'm not going to enforce these rules to the benefit of mostly my voters could they do something like that I haven't thought through that one the one I would think is more likely is Republican gets in there and says we really really need to spend more money to shut the border and Congress says sorry we ain't got none and we're not giving it to you and he says well I'll find some statute that gives me wide discretion and I'll just write an executive order that says spend the money here well and in fact that is what the Trump Administration did I think they tried it yeah and which is why some have you know thought that this is not a good precedent to be sending in general if a if a first Trump Administration decided they wanted to use this kind of authority to build their border wall I have no idea what a second more creative Trump Administration would come up with to do with this kind of authority but I can tell you it's going to be a heck of a lot more creative than that well we will definitely leave those conversations for another day I want to go back to Emanuel though getting back to this this picture of you know even if these loans are forgiven it doesn't necessarily solve the fact that people are taking out new loans every year uh we haven't changed the nature of the loan programs and the institutions um you know are involved in that as well they are often CL uh clamoring for more tools to be able to limit borrowing and make sure that um college is more affordable but from the institutional perspective what is their responsibility and what are some of the tools that they would like to have and don't have today to make College more affordable yeah it's a really good question well first and foremost in talking with our member presidents about this particular issue a lot of them of course they want what's best for their students there and and in their opinion these are students that have already graduated and so they are you know living their lives pursuing their careers and at that point the institution doesn't really have a whole lot of control over what's happening you know choices that are being made situations that are you know happening in their former students lives um but when it comes to accountability you know there are proposals out there that obviously want to hold more institutions accountable and from conversations I've had with our presidents they don't mind being held accountable per se but if it does come down to something such as risk sharing which is something that we've been hearing about and seeing and various proposals out there regarding that then Mike you mentioned the ability to limit borrowing if that is the case you know right now um institutions don't have that ability students are able to borrow as much as they need to it's in the PLUS Loan program it's just unlimited borrowing up to cost of attendance and so sometimes there are concerns about what students are borrowing for but that does not mean that presidents don't understand the fact that there are students from low wealth families who need to who are going to have to borrow more money because they don't have any other resources to pull from and they have to be able to eat and to live and to get to school and get back home and you know those sorts of things um but at the same time I would want to say that our institutions are very sensitive to the fact that um there's $1.6 trillion do in federal student loan debt still out there with about 43 million borrowers right um and that there is a huge need and they want to be a part part of the conversation of making College more affordable which is why um they have come together and they are very supportive of doubling the pil Grant so um I have to throw that in there because they ask about that a lot you know it's something that they really believe could be a great solution or at least you know investing in that program which we have seen that investment happen from Congress it's increase $900 over the past two fiscal years um changes to the fast FL simplification Act of 2020 is going to help around 1.7 million more borers access the maximum pel it's going to give access to around 600,000 more borers according to secretary Cardona and what he's been articulating in hearings as of late um so I think the conversation continues great staying on that issue of addressing other aspects of the Loan program lene you've said that if we focus on loan forgiveness and don't focus on fixing the overall system we're going to miss an opportunity and if we do shame on us I think that's your those are your words exactly have we missed our shot here and if so what do we do about that if not what are some reasonable in this world realistic reforms that we should look at to instead we absolutely haven't missed our shot because there are still people en enrolling in college and starting right now for you know the next academic year and taking out loans right now um and and we need to fix it you know one of my major concerns about um the idea of wiping away past student borrowing is that it does absolutely nothing to fix the problems moving forward and spends a heck of a lot of money doing so and so you know when you think about for example um that half of this outstanding student loan balance is from graduate programs where as Emanuel said there's essentially unlimited borrowing um that's a problem because if if borrowing is unlimited then schools have no reason reason to not you know double triple tuition they can make up whatever number they want because we've created a policy that says you can literally make up whatever number you want and then students can borrow to fix it and um and I think that is even more disconcerting when you look at this new um you know income based repayment plan which I think is really important and also creates a potential moral hazard because what we're doing is saying okay you actually don't ever have to pay back your student loans again we will not ever let your balance grow no matter how much um you're paying into this even if it's less than what your interest would be um which again um incentivizes institutions to say okay great I'll I'll make it more expensive there's no reason not to so I think what what we really think a lot about is how do we change that incentive we can't continue to send blank checks out um for and and not really even know what the outcomes are that we're getting uh we can't continue to um pay uh folks that are you know attending higher education programs pay those programs um without knowing anything about what the outcomes are and whether they're delivering a real return on investment to students and taxpayers um and we can't continue to have people taking out unlimited loans for a a program that they think is going to be good because you know what it's accredited it's allowed to um you know access title 4 Aid that's a stamp of approval that we're putting on that program and then it turns out a lot of those programs are leaving people not better off than when they enroll they're leaving people below the poverty line they're leaving people um making less than they would have if they just would have gotten a job with their High School degree and they're leaving people not able to complete um but also have the loans and those are the folks that are defaulting people who weren't able to complete their degree but they have the loans still but they don't get the you know earnings premium from having the degree to be able to pay for it so I think we really need to look across the board and I the the thing that actually makes me excited and I don't often have a lot of optimistic news in DC nowadays but even in the past you know week and a half we've seen bipartisan attention to this problem in a way that I think is super super important so uh about 10 days ago Senator Cassidy who is you know a huge leader on these issues um on the Republican side put out a package of bills that would limit graduate borrowing um that would also say if you are a an um undergraduate program any program you have to show that your most of the folks that enrolled in your program six and 10 years later are making more than the average high school graduate that seems like very basic measure of return on investment to me are you better off or worse off than you would have been if you had never enrolled um and then he even went further than the Democrats have and said and for graduate programs that should be better off than a ba if you are not making more money than than the average ba holder don't go to that school and I think that's that's a really there's a lot of nuances to it but that's a really interesting thing to think about uh moving forward and it really ties in very similarly to what the administration has done on the gainful employment programs where they said same idea earnings premium are you making more than a high school graduate if not don't have the taxpayers pay for this program and then they went further and said and we're going to look at that data for every single program not just for for-profit programs or career programs but all of them so it feels like we're moving in a Direction Where We actually want to look at the outcomes in higher ed there's a lot to still figure out about how to do that in a way that um you know supports institutions that are doing The Omen work of of economic Mobility um but um but at least we're talking about it and I think four or five years ago we just weren't I love the optimism I share it and um you know probably depends on the details uh to actually get it over the finish line but you know you started by saying that you think we're going to have more seasons of this that this is not going to be the end of the exciting courtroom drama on uh student loans so you alluded to the idea that there's maybe a plan B from the more Progressive wing of the democratic party okay this didn't work this got struck down by the courts if that's in fact what happens what is that plan B tell us a little bit more about what that might look like well I think the first Plan B is going to be protesting in front of the Supreme Court which is why they wanted to do it on the weekend um and then the um second Plan B is going to be putting those signs on the lamp posts all around the White House that say hashtag cancel student debt um which if you've been in DC for um longer than uh you know nine months you um saw ubiquitously all around the White House so there's going to be a lot of Grassroots pressure I'm sure and then what what the pressure is going to be asking the administration to do is to say okay do it again again but do it instead of using this Heroes act that is probably not going to be upheld do it under the haa Authority The Higher Education Act Authority that says the Department of Education has the ability um to compromise and settle um different kinds of student loans because this this money is owed to the department so essentially the department can say you don't owe it to me anymore um but I think um a like that's going to start this whole clock over again and this you know the poor people that are sitting around wondering do I have that $20,000 or not that creates a whole new set of jerking around that that we're going to have to worry about um especially if you're making payments should you be making the payments or not are your loans gone or they not gone it's all very confusing and unprecedented um but also what I worry about is that's the same Authority that the Administration has used to do a lot of other things including cancelling loans for borrowers who have been defrauded by predatory institutions which I very much support that's the same Authority same Authority they're using to do these income based repayment programs well if you ask the Supreme Court oh hey does this apply and then the answer is no the answer might be no for a lot of those other things too and question whether they're standing for people to challenge it but it just worries me because there are things that the department should use that Authority for and if you take it to this extreme then it may be struck down altogether and then you don't get to use it well there are questions in this case not just on these loan programs but there are a lot of other areas where this department and this Administration are maybe stretching their Authority a little bit beyond what what power Congress has given them and this supreme court has shown a willingness to curb that a bit Manuel I want to ask you you know there's this is not a loan policy and acce has been um fairly neutral on the loan issues but you have been very outspoken on another area where the department is perhaps stretching its Authority which is the third party servicers guidance and potential regulation that might come out for those who don't know this could potentially involve the Department of Education regulating the entirety of the education technology sector has a lot of people worried including the public institutions that rely on them and many many others who are providing any number of services to colleges and universities tell us a little bit about what that might mean if the if the court comes down to your point L and says okay you don't have this Authority you don't have this Authority could there be challenges to some of these other policies as well well my response to that would be yes I I I think absolutely um we as we articulated to the department were very very concerned about the expansion of the third party Serv service or definition which is completely not in line in our opinion with the higher education act with the antenna of Congress and would have caused a number of issues which we're happy that they put a halt on that but even when you think about um the manner in which they went about trying to move forward with that it was through sub regulatory guidance and earlier in the spring they actually put out in their unified agenda that they were going to look at third party servicer issues you know so now you have a dear colleague and other sub regulatory guidance um a Blog I to as well talking about these issues and what institutions have to do to abide and to comply and um remember these institutions are made up of individuals who have good intentions uh you know they're there to help students um they're they're there to provide uh a service that's a quality academic program and the makeup of that and um but these individuals also want to make sure they're abiding by the law and so if the Supreme Court does Rule and say hey this will not stand then I think that that gives a little bit more weight to the fact that well with the third party servic issue or other issues like that that may come down the pike we can look to this and point to this and use this as an example of why they should in a lot of ways in in the best way possible to say it but stay within their Lane that Congress gave them um and in speaking to the department like there are great people that work there credible people that work there very smart people that work there right um and they're trying to do what they believe is right um which every Administration that comes in they put forward policies that they believe is right and so we can't fa them in that but however when it comes down to figuring out clever ways to give themselves The Authority well that should never really be the case Congress is the p is is the branch that has that authority to determine these types of things and to build onto something that Len said earlier really quickly about just student loan repayment in general there's too many repayment plans out there there's just too many repayment plans um and Len talked about on the Senate side but I want to quickly highlight the fair act that on the house side uh just was introduced with Dr Fox and rolling back all of those repayment plans simplifying those back to two which we have heard before but being a little bit more generous to bars and what we've seen before in the past too I think that just shows that Congress is really thinking about ways to simplify this process so bers can better understand what it is they're getting into and what it is they have to comply with and the same should be for the Department with institutions complying it should be easier to understand and to digest and when you have all of these random things happening coming and going then you just kind of create chaos so so we've been asking these questions with the assumption that the court will side uh with the states and with the the borrowers who uh sued the department but it's possible they won't we have no idea and so Russ I want to ask you just one final question then we'll go to some audience questions and some questions from folks who are watching online but you're involved in another case that's on hold right now because of these case before The Supreme Court tell us what happens if the court rules uh in favor of the department are the loans forgiven are there other cases that are going to put that back on Ice tell us I think if the court rules on the merits in in favor of the department that puts Challengers and objectors to this whole program in a tight spot I'm not sure there's a plan B at that point um give us some time we might think of um if all they do is throw it out on standing well then our case presents a different standing Theory um um and we argued it in an amus brief in the cases that are before the court now um and we think it's an alternative standing Theory um it's probably not the right time and place to get into the nitty-gritty on understanding but there's there's something called the Public service loan forgiveness I think it might have been mentioned earlier um and nonprofits and state governments nonprofits like AI I guess benefit from that because if you have outstanding student loan debt and you work for a nonprofit or a state government for 10 years and make your payments throughout the 10 years you get your entire remaining balance um discharged after the 10 years so the theory of standing is that Congress deliberately gave that competitive advantage to governments and nonprofits when they're seeking to hire and retain college graduates and now comes now the Department of Education and says oh it doesn't matter who you work for we're going to wipe out your your debt whether you work for a nonprofit or government or you work for you know a for-profit corporation and I think that puts the nonprofit employers and state employers it removes a an advantage that Congress gave them in the marketplace I think that's a sufficient injury to constitute standing so um you know we think our case would survive and then go forward if all the court did was throw the case out on standing um but you know we'll see we'll see what happens tomorrow morning um with that we have time for just a few questions there are uh microphones that that are going around um back there so please raise your hand if you have a question in the room and folks will come around with microphones when you do um just site your name and your affiliation and let us know your question yep back here okay Mark gold wine committee for responsible federal budget um when do you all expect the administration to release their final income driven repayment Rule and Implement that and uh do you expect a core challenge L you want to take that yeah I mean well I never trust the it's coming real soon because it seems like that's happened a lot um throughout the administration in some in some respects because of coid and other things um but what I've heard is it's coming real soon so we'll see and I think it creates enormous pressure um to to actually get the rule in place um you know as soon as humanly possible if they're going to start repayments um they need to tell people what plan they're allowed to be in um and they can't you know have people start finding out their servicer and then getting into a new payment plan and whatever so I think um we're hopeful that it will you know be in place and ready by the Fall by the time people have to start paying their checks again um and I'll say politically uh they better do that because even if they do do um you know another round of um litigation over you know using some other authority to cancel student debt a lot of people still have student debt they need to pay um and they're not going to have it canceled right away because they will be ongoing litigation um and so they need to have something to give to folks so I think they're trying to get it done very very quickly um but uh you know there's only so many people in the department and there's a lot of other things to do um so I'm hopeful it comes out by by the Fall um I think that there probably will be litigation but um at least from you know what I've heard from some of the smart folks who spend more time in a courtroom than I do uh there there might be a tougher standing case there because I don't you know I'm not sure who has um the injury to say that they can challenge that case that being said I mean the court the reason that it was so clear that it was going to be very very hard to defend in court um was because of the Supreme Court's decision last year um in the EPA case where um you know the court said you can't do this like giant thing on climate change through this regulation because that's not what Congress meant um and the standing was super super fuzzy there but they said well this is a major question this is something that has a lot of political or economic significance and so we're going to be a little bit more flexy withstanding because we think that we shouldn't just let um government do things that have like huge significance and nobody's allowed to challenge it in court and so if this if this isn't a major question I don't know what is and it's possible that you know an income based repayment plan that very frankly is um you know even more money than we're talking about here as Mark well knows um I'm citing his research there um is is also a major question so um as a longtime Court Watcher I find that people are very strict on standing when they don't like the merits of a case and they're very open to somebody having standing if they do so um it's it's very possible it will certainly be challenged in court whether it gets this High I don't know um but I think it's also going to be challenged in Congress there's a lot of folks that are worried about how expensive it is and it's going to be the next Target um and they're there are Democrats that are worried about how expensive it is too I think if they had just done that um that Congressional review act vote um where a handful of Democrats sided with Republicans they had done it just on cancellation and not going back on all of the payment pause stuff you would have seen a much higher number of Democrats side with Republicans because there's a lot of folks that don't love the cancellation piece or don't think that the um department has the authority to do it and um you know they they were very worried because it actually meant you were going to go back and add balances to people's um you know to people's loans and that seemed unfair and so a lot of folks voted against it but I think you would have ended up with a with a higher number of Dems and so it's possible we could see even bipartisan movement as he said in Congress to say this is our job to figure this out so let us figure it out well yeah and it it gets to something Emanuel was alluding to earlier that if you're having to kind of squint at a 20-year-old law and suddenly you find something that gives you the authority to spend hundreds of billions of dollars the court has kind of said in the EPA case and some of the other recent cases that maybe that's not going to be acceptable and so we'll we'll see how broad uh the ruling is tomorrow if they do in fact rule against the department on some of those questions uh Russ just briefly I'm wondering if you have an opinion on standing it's been tough on this case there were a lot of people sitting in this room I remember at different events in the fall and last summer saying oh there's no way that these cases are going to proceed and here we are at the Supreme Court do you think there is a chance of someone having standing on a challenge to the IDR plan yeah I think it's it's going to be at least as challenging um I really haven't studied the IDR in a way that like got my wheels spinning about who might have standing but just the little I know about it I suspect it'll be a similar challenge um but um you know if if there's someone out there we'll find them uh moving on to a question from uh people watching online do you think the Biden Administration will cooperate with the bipartisan effort in Congress to reform the student loan system anybody want to take that well I guess I'll uh try to chime in here do I think they will cooperate uh it depends on what chamber they're working with maybe um I would say the house side probably not so much um just because of the political ideologies and the differences there not because of the inability to work together but on the Senate side they're forced to be a little bit more bipartisan on the issue so I think that if there's going to be successful collaboration between the department and a chamber of Congress it would more than likely be the Senate side um but as we have seen in various proposals and one that I had mentioned earlier uh there have been there's ideas and thoughts that that members have about repayment and about simplifying that this is nothing new we've been seeing this for years but the department yet is still moving in a direction that is not simplification and back in the negotiated rulemaking sessions when they even put forward this ex this revised repay plan and I think at that time they were calling it the ex the extended income contingent repayment plan is the name they had used in the negotiated rulemaking session a number of negotiators were upset in saying why are we creating yet another plan for borrowers in addition to all the other plans that we have this is already too much why don't we simplify I mean it was across the board for the most part we were all saying simplify simplify and that's not what we've gotten what we got instead was okay we won't create a new plan but we will just revise the current repay plan and make it different but now we're hearing it's going to be called the save plan so is that going to be new or what are we actually doing there but I wanted to talk about that really quickly because I believe there's a lot of political pressure with the income driven repayment plan to move forward because in August of last year when the White House put out the announcement about this whole $10,000 $220,000 student loan debt forgiveness they also you know revealed details about this income driven repayment plan which were different than what we actually saw in the negotiated rulemaking session so for the first time a lot of us that sat around that table were reading about this plan with new things that we didn't even know the department was even considering so since that conversation's been happening since August for the Department I think that there's political pressure for them to definitely get this thing through the door by J by November one so it can be in effect by next July um and it'll be interesting having them do that plus try to fulfill their robust regulatory agenda that they put out earlier this year I will just say though the the reason that everyone can agree on simplify and then it never happens is that if you're in the department just to give them you know credit for a second on this and or any department for that matter um if you are going to change the plans um you can't make everybody go into a new plan that hurts anyone right you can't say oh I'm going to change your contract and put you into a plan that's less good for you personally financially and there are so many different permutations of people and how much they're making and how much loans they have and how long they have to pay off and whether they're um you know eligible for pslf all these things and so you can't just be like okay actually let's start over because all these loan contracts that are out there so yes we'd all love to just start over we can't do that I think everybody's trying and there is a lot of um you know there is a lot of movement to try to say okay well what I think what they were thinking is well if we make this one as generous as we are maybe this one will be okay for everyone because it's just that generous um which is possible I don't know but I I think that that's that's a little bit more complicated I will say on the B bipartisan front though we're going to have to see bipartisan action around these issues very soon and that is around funding uh FSA we need uh we need to if we're going to actually get the the you know student loan payments starting again we're going to start this giant machine again we have to staff it and servicers have laid people off they don't have people to take the calls servicers don't know where their borrowers live because people have moved over the last three years new people have graduated that have never even made a payment there's so many problems and there's not enough people to staff it and you know I'm this I'm not an expert on this but the folks we work with at new America who are I mean they think that basically we pretty much need to double fsas Appropriations to make the payment restart happen in any way that's not a complete disaster and I'm not sure if you have been following but there was a debt ceiling there were some limits on what we can spend and now there's even a bigger fight about maybe we want those limits to be even lower um and so there's not a lot of money laying around but I think it is incumbent on all these members MERS to get together and figure out where are we going to piler from to make this happen because um if we just lead into um yeah everybody's got to pay their student loans again but we don't prepare the machine to make that happen we can't see the student loan machine collapse and that's not good for borrowers that's not good for taxpayers it's not good for anybody um and you know one of the very most cynical Republicans I talked to about this said well maybe they're just going to try to make the loan machine collapse and then they'll say well I guess you don't have to pay your student loans because there's no servicers to collect them I don't think that's the best way forward so I think we got to figure out how do we make this work again how do we make it work in the future for borrowers um and that is going to absolutely take both Democrats and Republicans and you wonder why it's so hard for students to figure any of this out uh you just read the mind of somebody who asked that exact question about FSA uh from somebody watching online so thank you we'll cross that one off the list uh we have just under a minute left if there there's anybody in the room who has a very quick question we can uh go right here just wait for the microphone if you could thank you you brought up the debt cealing just now I'm curious to know if there had been no debt cealing deal struck between the president and the speaker do you think and the president had used executive action to raise the debt ceiling unilaterally do you think the Supreme Court would have struck that down or do you think they would have recognized the economic consequences that would have come with the default I think uh even the president's lawyers said that they would strike that down which is why they had to uh do something that they really didn't want to do and and agree to these funding limits they um literally the president's lawyer said you cannot do that so at least there are some limits to um what folks in the administration think that their their powers are here um and that's you know they swallowed something they really didn't like for it I will say uh the the you can't kick the payment pause out again part was a surprise to people in that in that deal and I think it actually gave the administration cover because now they can't kick it out again and they were going to be asked to kick it out again especially if the court um rules against them tomorrow so uh I think they were like okay see now we can't and now they're trying to figure out this you know making sure that people don't default but um but it was interesting because nobody knew that was going to happen and then all of a sudden everyone's like wait what's in there oh we're starting loan payments again cool so now we got to fund the starting loan payments again but one quick thing I'll add about starting the loan payments is that the secretary did say in hearings that they were definitely ending it and so that came before their the fiscal responsibility act so I think that it was easier for that to be a bipartison agreement because the department already put it out there um so it was just you know able to move forward in that way third time for the third time it's third time final yeah tomorrow morning hopefully we will have an answer to all of these questions and many more but there might be a lot more drama want to come on this and uh many other issues so please uh join me in thanking our panelists thanks so much for coming everybody stay tuned
