In a landmark decision, the U.S. Supreme Court has blocked President Joe Biden’s plan to forgive up to $20,000 in federal student loan debt for eligible borrowers. The ruling, which was issued on June 30, 2023, denies relief to about 40 million Americans who collectively owe nearly $1.7 trillion in student loans.
The Legal Challenge
The court’s decision was based on two cases that challenged the president’s authority to cancel student debt under a 2003 law called the HEROES Act. The law allows the Secretary of Education to waive or modify certain rules and regulations related to federal student aid programs during a national emergency, such as the Covid-19 pandemic.
Shortly after taking office, Biden announced his student loan forgiveness plan in January 2023. He said that the plan would help millions of borrowers struggling to repay their loans amid the economic crisis caused by the pandemic. He also said the plan would reduce racial and economic inequality, boost consumer spending and stimulate the economy.
However, six states — Missouri, Alabama, Arkansas, Georgia, South Carolina, and Texas — sued the Biden administration, arguing that the president had exceeded his legal authority and violated the separation of powers. They claimed that the HEROES Act did not allow the Secretary of Education to cancel student debt on such a large scale and that only Congress could enact such a policy.
Two private citizens, who said they had paid off their student loans in full, also filed a lawsuit against the plan. They argued that the plan would harm them because it would devalue their education and create unfair competition in the job market.
The Supreme Court’s Ruling
The Supreme Court ruled 6-3 against the Biden administration, agreeing with the states that the president had overstepped his bounds. The court’s conservative majority, led by Chief Justice John Roberts, said that the HEROES Act only allowed the Secretary of Education to waive or modify existing rules and regulations, not to create new ones or rewrite the law.
“The Secretary’s comprehensive debt cancellation plan cannot fairly be called a waiver — it not only nullifies existing provisions, but augments and expands them dramatically. It cannot be mere modification, because it constitutes ‘effectively the introduction of a whole new regime,'” Roberts wrote in the majority opinion.
The court also said Missouri had standing to sue, meaning it had a legitimate interest and injury in challenging the plan. The court dismissed the case the two private citizens brought, saying that they did not have standing because they did not show how the plan would harm them.
The court’s liberal minority, composed of Justices Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson, dissented from the ruling. They argued that the court should not have taken up the case at all because none of the plaintiffs had standing to sue. They also said that the court was interfering with the executive branch’s ability to respond to a national emergency.
“The plaintiffs in this case are six States that have no personal stake in the Secretary’s loan forgiveness plan. 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,” Kagan wrote in her dissenting opinion.
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Readers Bureau, Contributor
Edited by Jesus Chan
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