The Supreme Court on Friday struck down the Biden administration’s program to forgive the student loan debt of more than 43 million American borrowers.
In a 6-3 decisionwritten by Chief Justice John Roberts, the court ruled that the Department of Education exceeded its authority when it decided to write off more than $400 billion in federal student loan debt.
The program, which invoked emergency powers because of economic hardship caused by the pandemic, would have written off $10,000 in student debt for all borrowers who earned less than $125,000 and up to $20,000 for borrowers who also received Pell scholarships.
Six Republican-led states – Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina – argued that the program was executive overreach. The administration pushed back that the plan was legal under the 2003 HEROES Act, which states that the government can provide relief to student loan recipients when there is a “national emergency.”
Roberts rejected the administration’s argument, writing that precedent “requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy.”
“The Secretary claims the HEROES Act gives him the authority to write off $430 billion in student loan principal. It doesn’t,” Roberts wrote. “Today we hold that the Act allows the Secretary to ‘waive or modify’ existing statutory or regulatory provisions applicable to financial assistance programs under the Education Act, not to rewrite that statute from the ground up.”
Justice Elena Kagan, in her dissent along with Justices Sonia Sotomayor and Ketanji Brown Jackson, said the court is overstepping its authority.
“From the first page to the last, today’s opinion turns away from the demands of judicial restraint,” Kagan said in her dissent, which she read from the bench. “At the behest of an uninjured party, the majority decides a controversial public policy matter that belongs to the politically responsible branches and the people they represent.”
The court’s decision is a blow to President Joe Biden, who made the fight against student loan debt a key campaign pledge. The loan forgiveness program was implemented just before the 2022 midterm elections, and Biden emphasized how the relief would have a life-changing impact on middle-class Americans.
The White House earlier this week continued to decline to say what a “Plan B” would look like if the court rejects the plan.
He has not yet reacted to Friday’s Supreme Court ruling.
Student loan payments are due to resume in October after a three-year break during the pandemic. Interest on federal student loans will begin accruing in September.
Senior Democrats criticized the court’s decision and quickly called on Biden to explore more options to provide relief to borrowers, while Republicans praised the ruling.
“This disappointing and cruel ruling shows the ruthlessness of the MAGA Republican-controlled Supreme Court,” Senate Majority Leader Chuck Schumer, D-N.Y., said in a statement.
“The fight will not end here,” Schumer continued. “The Biden administration has remaining legal avenues to provide broad student debt cancellation. With the pause in student loan payments expiring in a few weeks, I urge the administration to do everything it can into their hands to deliver millions of working and middle-class Americans struggling with student loan debt.”
House Speaker Kevin McCarthy said the decision “builds on” the Republican-led legislation to end the student loan payment pause.
“The president must follow the law,” McCarthy tweeted.
In a separate opinion, the Supreme Court unanimously said on Friday that two individual borrowers who also challenged the program lacked standing and dismissed the case.
This is a developing story. Check back for updates.
