(The Center Square) – Cancelling hundreds of billions of dollars in student loan debt cannot be done by President Joe Biden and his administration, the U.S. Supreme Court ruled Friday.
In a 6-3 opinion, the court said Biden’s administration did not have the authority to unilaterally cancel student loan debt, blocking the president’s plan to cancel $10,000 per borrower.
Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson dissented in the case known as Biden v. Nebraska.
“The issue presented in this case is whether the Secretary has authority under the Higher Education Relief Opportunities for Students Act of 2003 (HEROES Act) to depart from the existing provisions of the Education Act and establish a student loan forgiveness program that will cancel about $430 billion in debt principal and affect nearly all borrowers,” the court said.
The court ruled that the previous legislation allowed for tweaks to student loan forgiveness but did not allow for the sweeping forgiveness Biden tried to enact.
“The authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them,” said the majority opinion, written by Chief Justice John Roberts.
The court also ruled that the state of Missouri, a lead challenger in the case, would suffer injury from the plan and therefore had standing to challenge the forgiveness program, which was a key legal question in this case. Missouri was one of six states that sued.
In the dissent, written by Kagan, the justices argued that during COVID-19 both Republican and Democratic administrations used the HEROES Act to delay student loan repayment, signaling a universal understanding of the legislation’s broad power.
“The plaintiffs in this case are six States that have no personal stake in the Secretary’s loan forgiveness plan,” the dissent said. “They are classic ideological plaintiffs: They think the plan a very bad idea, but they are no worse off because the Secretary differs. In giving those States a forum – in adjudicating their complaint – the Court forgets its proper role. The Court acts as though it is an arbiter of political and policy disputes, rather than of cases and controversies.”
Federal student loan repayments had been put on hold. The Department of Education said last year that repayment would resume 60 days after this court ruling.
As The Center Square previously reported, Biden announced last year that his administration would cancel $10,000 in federal student loan debt for those making less than $125,000 per year. For those who have received Pell Grants, the debt forgiveness could total $20,000. The administration also said debtors would be allowed to cap repayment of their loans at 5% of their income.
Biden said in the original announcement that his plan and the delayed repayments were “to give working and middle-class families breathing room…”
The U.S. Congressional Budget Office estimated that Biden’s debt plan would cost taxpayers about $400 billion. The Committee for a Responsible Federal Budget released an analysis last year predicting it would take only a few years for debt levels to return to the precancellation levels.
Biden’s student loan announcement has been a highly political fight since it was announced.
House Republicans voted in May to overturn Biden’s student loan forgiveness under the Congressional Review Act, which allows Congress to undo federal rules. The Senate then voted in June, with the support of a few Democrats, to also overturn the plan.
Although the plan had little chance of becoming law since the president would have had to sign the legislation, it showed the student loan forgiveness was far from a highly popular plan. In fact, several Senate Democrats turned against it as criticisms piled up that it is unfair to those who worked to pay off their loans or who never took them out in the first place.
“President Biden’s student loan transfer scheme shifts hundreds of billions of dollars of payments from student loan borrowers onto the backs of the American people,” Rep. Bob Good, R-Va., who led the House effort, told The Center Square earlier this year. “I am proud to lead the fight against President Biden’s reckless, unilateral, and unauthorized action that would unfairly penalize those who worked hard to pay off their loans or who never took them out in the first place.”
