$SoFi Technologies Inc.(SOFI)$ just rose 4.0% in Tuesday afternoon trading after reports that conservative justices are skeptically questioning President Joe Biden's plan to forgive billions of dollars of student debt held by millions Americans.
Chief Justice John Roberts led the conservative justices, who comprise a majority of the court, in questioning whether the Biden administration has the authority to cancel federal student loans as a result of the COVID-19 emergency, the Associated Press reported. Roberts, in his questioning of the White House's top Supreme Court lawyer, suggested that the administration had exceeded its authority.
Joe Biden has proposed several plans for student loan forgiveness. One of his proposals is to forgive $10,000 of federal student loan debt per borrower, which would benefit an estimated 16.3 million borrowers and would cost approximately $370 billion. Additionally, he has proposed forgiving all undergraduate tuition-related federal student loan debt for borrowers who attended public colleges and universities and whose incomes are below $125,000. This proposal would benefit an estimated 15 million borrowers and would cost approximately $370 billion.
However, it is important to note that these plans are still being debated and negotiated, and it is uncertain what the final outcome will be. Additionally, Biden has faced opposition from some members of Congress who argue that widespread student loan forgiveness would be unfair to those who have already paid off their loans or who chose not to take on student debt in the first place.
The plan has encountered a lot of resistance. Reasons for opposition include,
1.It is the taxpayer who ultimately pays the bill, and the taxpayer may not agree such a plan which should need to be passed by Congress;
2.It will make universities charge students more unscrupulouslyIt will also encourage students to lend more, and financial institutions are willing to lend, causing waste;
If a student loan forgiveness plan is challenged in court, the process for the Supreme Court to block the plan would depend on the specific legal arguments raised in the case. The Court would need to determine whether the plan is within the scope of the President's authority and whether it violates any provisions of the Constitution.
At present, the interest rate of student loans in the United States ranges from 4.99% to 7.54%, which is a relatively high expense. Especially for graduates. With interest rate going up, it is possible to be another high.
Are you betting on the change of Supreme Court to block the plan?
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