Keywords: Supreme Court Student Loan
The justices ruled in two cases challenging President Joe Biden’s authority to forgive federal student loans under a 2003 law called the HEROES Act. The 6-3 decision, with conservative justices in the majority, effectively killed the $400 billion plan, announced by President Joe Biden last year, and left borrowers on the hook for repayments that are expected to resume by late summer.
The Biden-Harris Administration’s Student Debt Relief Plan
President Joe Biden’s student loan forgiveness program. announced in August 2022, would have cancelled up to $20,000 in debt per borrower. The plan also included an extension of the student loan payment pause set during COVID and a proposal for a new income-driven repayment plan. To be eligible for forgiveness, students had to have federal student loans and earn less than $125,000 annually (or $250,000 per household).
Roughly 40 million Americans were eligible for the relief announced by the president last August, 20 million of whom would have had their loan balances erased altogether, according to White House estimates. More than 26.2 million people applied for the program, and over 16 million of those applications were approved before the Department of Education was forced to stop accepting applications due to the legal challenges.
The Supreme Court Ruling
A group of six states — Arkansas, Iowa, Kansas, Kentucky, Missouri and South Carolina — as well as two borrowers from Texas filed two separate lawsuits, arguing the debt relief exceeded the administration’s authority.
By a 6-to-3 vote, the high court agreed and ruled that federal law does not authorize the Department of Education to cancel such student loan debt. Writing for the majority, Chief Justice John Roberts said: “The authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them.”
Chief Justice Roberts put an addendum on his majority opinion telling the public not to interpret Justice Kagan’s dissent as a sign of discord at the Supreme Court. “It has become a disturbing feature of some recent opinions to criticize the decisions with which they disagree as going beyond the proper role of the judiciary,” he wrote, adding that reasonable minds could disagree about the majority’s reasoning but that “we do not mistake this plainly heartfelt disagreement for disparagement. It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country.”
The decision comes as a disappointment to federal student loan borrowers who were eligible for relief under the plan — as many as 43 million borrowers, or roughly 1 in 8 Americans. Come fall, student loan interest accrual and payments will begin again, affecting borrowers in all 50 states.
It would have been the most expensive executive actions in U.S. history.
The Student Debt Relief Plan would have been one of the most expensive executive actions in U.S. history. Opponents to the program argued that implementing such a plan would have placed an unfair burden on taxpayers who did not directly benefit from the loans. Opponents further argued that it is unfair to ask hardworking individuals, many of whom struggled to pay off their own debts, to shoulder the financial responsibility for others’ choices.
Instead of blanket forgiveness, a more equitable approach would be to focus on reforming the higher education system, making it more affordable and accessible for future generations without unfairly burdening taxpayers.
Keywords: Supreme Court Student Loan
