The U.S. Supreme Court, in a 6-3 ruling, put a halt to President Joe Biden’s plan for student loan forgiveness, marking a considerable drawback for his administration. The plan, designed to offer up to $20,000 in debt relief for millions of borrowers, was thwarted by the conservative majority, leading to increased tensions in the run-up to the 2024 presidential election and raising concerns for borrowers who were anticipating this debt relief.
Authored by Chief Justice John Roberts, the ruling indicated that the Biden administration and the Education Secretary had overstepped their authority by rewriting the law. Roberts wrote, “The plan proposed by the Secretary to forgive debt extensively cannot truly be referred to as a waiver – it not only voids current provisions but also greatly enhances and extends them.” He further clarified, “Regardless of how broad ‘waive or modify’ may be interpreted, it can’t sanction the complete redrafting of the law that has occurred here.”
Roberts emphasized that such an endeavor would require explicit permission from Congress, stating, “The issue is not about the need for action; it’s about who possesses the power to implement it.”
Those in the minority viewed the majority’s decision as being more political than legal. Justice Elena Kagan, expressing her concern, wrote that the Court was acting more as an arbitrator of political disagreements, rather than resolving legal disputes. She chastised the court for its continual overstep of the Congress and Executive Branch’s roles in making important, and often contentious, policy decisions.
The Biden administration had planned to leverage the HEROES Act’s authority to alleviate the debt. The initiative was designed to assist borrowers who earned less than $125,000 individually or $250,000 per household in 2020 or 2021. Biden argued that the relief program was crucial to avoid a rise in defaults or delinquencies among those impacted by Covid who have outstanding loans.
According to the White House, before a lower court in Texas issued a nationwide injunction in November, it had received 26 million applications for the program, with 16 million of them being approved for relief.
The critics of the program, including Republican-dominated states and conservative groups, deemed the plan as an illegal attempt to erase an estimated $430 billion of federal student loan debt.
Following the Court’s decision, borrowers who were set to benefit from Biden’s plan will no longer receive the proposed debt forgiveness. Payments on student loans, paused due to the Covid-19 pandemic, are set to resume in October.