Biden’s Student Loan Forgiveness Blocked by Supreme Court, By Yahaya Othman

In a setback for President Joe Biden, the U.S. Supreme Court has rejected his proposal to cancel $430 billion in student loan debt, intended to assist up to 43 million Americans and fulfill a campaign promise.

President Biden criticized the 6-3 decision, primarily driven by the court’s conservative members and written by Chief Justice John Roberts. He announced alternative measures to provide relief for student loan borrowers.

The court sided with six states leaning conservative—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—who opposed Biden’s student loan forgiveness plan. This ruling is a blow to the 26 million borrowers who applied for relief after Biden’s announcement in August 2022, marking a political setback for the president.

“While one path has been closed with today’s decision, we will pursue another,” Biden stated at the White House, unveiling steps under the Higher Education Act to support student loan borrowers. “I will never cease fighting for you. We will use every available tool to provide you with the necessary student debt relief and help you achieve your dreams.”

Chief Justice Roberts criticized the Biden administration’s argument that the loan forgiveness program, linked to the national emergency caused by the COVID-19 pandemic, was simply a modification of an existing program. He noted that such a broad action would require explicit congressional approval.

Referring to U.S. Secretary of Education Miguel Cardona, Roberts wrote, “The secretary’s plan has ‘modified’ the cited provisions only in the same sense that the French Revolution ‘modified’ the status of the French nobility—it has abolished them and replaced them with an entirely new regime.”

Roberts added, “The secretary has expanded forgiveness to nearly every borrower in the country from a few narrowly defined situations specified by Congress.”

The court’s three liberal justices dissented, and the ruling was issued on the final day of the term that began in October.

The ruling applied the “major questions” doctrine, a robust judicial approach that allows judges significant discretion to invalidate executive agency actions of “significant economic and political importance” unless Congress explicitly authorizes them through legislation. The conservative justices had previously used this doctrine to strike down other Biden policies, including eviction protections for renters during the pandemic and the COVID-19 vaccination or testing mandate for large businesses.

Biden’s plan aimed to fulfill his 2020 campaign promise to cancel a portion of the $1.6 trillion in federal student loan debt. However, it faced criticism from Republicans who viewed it as an overreach of executive authority and an unfair advantage for college-educated borrowers at the expense of others who received no such relief.

Under the plan, the U.S. government would forgive up to $10,000 in federal student debt for individuals making under $125,000 who took loans for college and other post-secondary education. Additionally, recipients of Pell Grants from lower-income families could receive up to $20,000 in forgiveness.

The administration argued that the plan was authorized by the 2003 federal law known as the Higher Education Relief Opportunities for Students Act, or HEROES Act. This law allows the education secretary to “waive or modify” student financial assistance during times of war or national emergencies.

Both President Biden and his Republican predecessor, Donald Trump, utilized the HEROES Act to suspend student loan payments and stop accruing interest, easing the financial burden on borrowers during the COVID-19 pandemic.

Education Secretary Cardona stated that the Department of Education has finalized an income-driven loan repayment plan. This plan would reduce monthly payments to zero for millions of low-income borrowers, save other borrowers at least $1,000 annually, and eliminate excessive interest that leads to borrowers owing more than their initial loan.

Cardona also mentioned that the department would implement a 12-month transition period to help borrowers successfully pay without default.

Justice Elena Kagan, in a dissent joined by her two fellow liberals, derided this doctrine as “made-up.”

“Small wonder the majority invokes the doctrine,” Kagan wrote. “The majority’s ‘normal’ statutory interpretation cannot sustain its decision. The statute, read as written, gives the Secretary broad authority to relieve a national emergency’s effect on borrowers’ ability to repay their student loans.”