Okay, So what is your first and last name?

I am Glenn Lopez.

This is Glenn Lopez. He's a freshman at Morgan State University. Last Tuesday, he traveled to Washington, D.C. to rally behind President Joe Biden's student debt forgiveness plan, which was being challenged at the Supreme Court. And when I heard this interview, it really struck me because instead of giving our CNN team a rehearsed diplomatic answer about why he was there, he just kind of put it all out there.

The real answer is I'm kind of broke. I ain't really got it on me like that. And honestly, the movement for this really supports people that are in the same financial situation as me.

And when we talk about student loans, it really is just that simple for some people. They need cash in their pockets and student loan payments take a big bite out of that. And remember, Glenn is just a freshman. His loans aren't due yet. He has years to get his ducks in a row. But for millions of others, this looming Supreme Court decision could shape what the next few months look like. My guest this week is CNN politics writer Katie Lasco. We're going to break down the Supreme Court arguments, what it's been like for borrowers waiting for a ruling and why a new repayment plan from the Biden administration could actually be more generous in the long run. From CNN, this is one thing. I'm David Rind. Katie can you remind us how we got here? Like, what is the story of this student loan forgiveness program?

Sure, sure. I actually I think I want to take us back to 2019 when we had a bunch of people running for the Democratic presidential primary. I mean, we have Senator Elizabeth Warren and Senator Bernie Sanders putting out plans to cancel student debt and make certain colleges tuition free. So that's when we had some formal real formal plans about canceling debt. And I think to a lot of people seemed like a pie in the sky idea. Later on in the primary, Biden actually does put out a plan to cancel some student debt, but he doesn't really seem to say that he would have the power to do this without Congress. He says he supports it, but he's pretty wishy washy for a while, even after he becomes president. Whether he can do it with a stroke of a pen. So then the pandemic comes and we have this pandemic pause on student loan payments. So as of right now, no one with federal student loans has had to make a payment since March 2020, which...

Right that's still the case.

That is still the case. And we're not exactly sure when they will resume. But Democrats, some Democrats, they keep the pressure on Biden to cancel some student debt. They want $50,000 per borrower canceled. And this goes on through the first year or so of Biden's term in office. So finally, we get to last August. It doesn't look like Congress can get anything through. Biden kind of teases this announcement for months. Borrowers are waiting and waiting. And in August, he announces a plan to cancel up to $20,000 of student loan debt for borrowers who make under $125,000 a year.

And that money would just come off the books.

Yes, exactly. The administration rolls out the program in the fall. Applications are available, and then they're hit with a bunch of lawsuits.

All right. One of President Biden's key midterm initiatives has hit a roadblock. A federal appeals court put a temporary hold on his student debt relief program.

The lower courts struck down the program in November. The administration has to stop taking applications. No debt has been canceled yet. And then last week, here we are at the Supreme Court and the justices are hearing oral arguments about whether Biden has the power to cancel the student loan debt.

Okay. So how did these Supreme Court oral arguments play out? Like, what did you hear?

So I think it's a little bit hard to read from oral arguments and try to guess what the justices will decide but...

A lot of tea leaves, right?

Yeah. Yeah.

We'll hear argument first this morning in case 22256, Biden versus Nebraska.

But there was definitely some skepticism over whether Biden can cancel the student loan debt, especially from the conservative justices.

If you're talking about this in the abstract, I think most casual observers would say if you're going to give up that much amount of money, if you're going to affect the obligations of that many Americans on a subject that's of great controversy, they would think that's something for Congress to act on.

Including Chief Justice John Roberts, who kept hammering home how much money this is going to cost. The CBO estimates it's over $400 billion if the program was implemented.

But what I think they argue that is missing is costs to other persons in terms of fairness, for example...

Conservative justices also brought up the point of fairness a lot. Is this plan fair to taxpayers who maybe don't have student loans or already paid off their student loans? Yeah, there's still these questions that the liberal justices brought up too often. Whether or not these plaintiffs even have the legal standing or the right to bring these cases, they have to show they were legally harmed or they would be legally harmed by this program. And the liberal justices were pretty skeptical that they have that right.

Would we be breaking new ground then, if on this basis we found standing?

Yes. I'm not aware of any case that would support standing on this basis.

And now we need to wait for the justices to issue their decision. We don't know exactly when that would come by. Likely we're thinking the end of June or early July. Then there's also the issue of the student loan payments, which have been on pause since March 2020. The Biden administration has tied the restart date to this litigation over the forgiveness program. So they say that payments will resume either 60 days after the litigation is resolved or at the end of August, whichever comes first.

So, like those payments are coming back one way or the other, separate from if the Supreme Court upholds this program.

Yes. Regardless of which way the justices roll, these payments, I would expect are starting this year.

But what happens if the program gets struck down? Like, does the Biden administration have any other options here?

Well, I think the Biden administration could go back to the drawing board, make some adjustments to the program, try it again. But that's going to take months, if not years. So that would put borrowers back in this this limbo, this waiting game. But there's also this lesser known change that Biden is working on implementing. And it could have a even more significant impact on current and future borrowers. Even if the forgiveness program is struck down.

So, Katie, you were saying that there's this other option in the works to kind of help out student loan borrowers that could be even more consequential down the line. What is it?

So it's called an income driven repayment plan. And there's already several of these in existence for federal student loan borrowers. But what the Biden administration has proposed is some tweaks to these plans in the effort of making monthly payments lower and also lowering the cost of the student loans over their lifetime for borrowers. So they essentially could be paying back less over the lifetime of the loan. These changes are in the works. The Department of Education is working on them, and they expect some of the provisions to go into effect later this year. And what I think is really key here is that this is a long term change. This will help borrowers now and it will help borrowers in the future as opposed to the one time forgiveness program that will wipe away debt for a lot of people right now, which is really helpful. But it does nothing to address the cost of college and does nothing for future students either.

Hmm. Yeah, but I do want to go back quickly to this idea of fairness around student loan forgiveness. Like you said, the Supreme Court justices brought this up. And I've certainly heard others say basically, hey, I did all the hard work of paying off my loans, so why should X, Y, and Z person get a break from my tax dollars? But beyond, you know, just being born at the wrong time, are there real financial ramifications at play here when you're talking about tossing millions of dollars of debt per borrower in the trash?

So I think there's two points to make here. First, this cancellation program will cost the government roughly $400 billion over time, and that's transferring some of the cost of college to taxpayers who maybe don't have student loans. And then there are some experts that say that canceling some student debt could actually drive up the cost of college in the future.

Hmm.

So they look at it this way. They say maybe future borrowers will see that President Biden canceled some student debt and think, oh, maybe the next president will do that for me, too. So they might be more inclined to take out student loan debt without worrying about having to pay it off. And in turn, colleges may decide to charge more for tuition and fees.

Hmm. Interesting. So it just kind of has a knock on effect. I know you've been talking to some of the millions of Americans who are anxiously awaiting this Supreme Court ruling. Do they have any regret about taking out these loans they needed to pursue their education? Like, how are they feeling about this?

Hi, my name is Lindsey Clausen, and I have some student debt. I have currently 68,000 in total.

So Lindsey is an educator in her thirties, and she tried really hard to get a college degree in the most affordable way that she could. She lived at home in undergrad. She got a teaching degree. And of course, life happens, though she couldn't really find a job when she graduated in New York. Her and her now husband ended up moving across the country to Washington State.

For us, it would mean a lot because we have some some financial goals for this year. And one of those goals to save for a house. And it would definitely make a lot more room for that and for other financial goals that we have in the future, such as expanding our family...

And so she doesn't regret the degree she got. She loves her job, but she doesn't know why it had to be so expensive for her to get this education.

Hi, Katie...

So there's a borrower named Blake Goddard that I've been talking to. He's an IT support specialist, and he's actually bogged down with over $150,000 of debt from DeVry University, where he got a bachelor's and master's.

In public loans I have 130,000. Altogether I owe over 150,000.

And he, too, he was looking for a degree that was practical where he could get a technical job. And at that time, DeVry, which was a for profit college, they ran a ton of ads. He said, Hey, this, this looks good. This is why what I think I want. Turns out he racks up all this debt.

Well, I would be one of the lucky ones where I actually had the Pell Grant, so it would be $20,000. But what's what's 20,000 out of 130? You know it. Yeah, that's great. But I still owe six figures. I want to pay it. I was just stupid enough to fall for it. I just. I wish we can make it so that nobody else in this country falls into the same trap.

Yeah. I mean, that hits home for so many people, I think. And even me, when I went into college at age 18, there's just no way I could have understood what that amount of debt can do to you over the course of your life as you're trying to establish your career. So I guess my question is, why is this system like this? And will it always be this way?

Right. You know, and there's so many people that end up in this situation, even when they tried like these borrowers to do it the cheapest way possible. You've got to think there's some systemic problem. And one part of it is, is financial education. What are these loans actually going to cost you 15 years from now? Can you sit down and see that on a piece of paper?

Interest is a big deal, right?

Interest is a big deal and it is hard to grasp what that's going to look like when you're 18, 20, especially when everyone tells you the way up is to get a college degree. And then you look at the overall picture and student debt still makes up nearly 10% of household debt.

Wow

It's not like in our parents and our grandparents where they can work full time in the summer and part time during the semesters and pay for their education, their tuition, their books and their boarding. That's that's just not possible for for any any generation past. And just it's just not feasible.

So even if the student loan forgiveness program is implemented, that helps a lot of people right now. But we still have this underlying problem about how much college costs.

Katie, thanks so much for the explainer. I really appreciate it.

Thanks, David. Good to be here.

One Thing is a production of CNN Audio. This episode was produced by Paola Ortiz and me David Rind. Matt Dempsey is our production manager. Faiz Jamil is our senior producer. Greg Peppers is our supervising producer. And Steve Lickteig is the executive producer of CNN Audio. And just a reminder before we go, if you have thoughts about the show, we really want to hear from you. Just head over to CNN.com/one for a super quick survey. Again, CNN.com/one. That's o-n-e. Thanks for listening. We'll be back next week. Talk to you then.