June 30, (THEWILL) – The US Supreme Court has struck down the Biden administration’s programme to forgive student loan debt.
A nine-member justices of the apex court, in a 6-3 decision, written by Chief Justice John Roberts, on Friday, held that the Department of Education exceeded its authority when it moved to wipe out more than $400 billion in federal student loan debt.
The programme, which invoked emergency powers because of the economic hardship brought by the pandemic, would have cancelled $10,000 in student debt for all borrowers who made less than $125,000 and up to $20,000 for borrowers who also received Pell grants.
Six Republican-led states including Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina, had argued the programme was executive overreach.
However, the Biden administration had argued that the plan was lawful under the 2003 law HEROES Act, which states the government can provide relief to recipients of student loans when there is a “national emergency.”
Roberts rejected the administration’s argument, writing precedent “requires that Congress speak clearly before a Department Secretary can unilaterally alter large sections of the American economy.
“The Secretary asserts that the HEROES Act grants him the authority to cancel $430 billion of student loan principal. It does not.
“We hold today 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, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, said the court overstepped its authority.
“From the first page to the last, today’s opinion departs from the demands of judicial restraint. At the behest of a party that has suffered no injury, the majority decides a contested public policy issue properly belonging to the politically accountable branches and the people they represent”, Kagan said in her dissent, which she read from the bench
Meanwhile, President Biden has condemned the ruling, saying the fight is not over yet.
Biden, who made tackling student loan debt a key campaign pledge, in a statement said, “This fight is not over. I will have more to announce when I address the nation this afternoon.
“My Administration’s student debt relief plan would have been the lifeline tens of millions of hardworking Americans needed as they try to recover from a once-in-a-century pandemic. Nearly 90 percent of the relief from our plan would have gone to borrowers making less than $75,000 a year, and none of it would have gone to people making more than $125,000. It would have been life-changing for millions of Americans and their families. And it would have been good for economic growth, both in the short-and long-term.
“The hypocrisy of Republican elected officials is stunning. They had no problem with billions in pandemic-related loans to businesses – including hundreds of thousands and in some cases millions of dollars for their own businesses. And those loans were forgiven. But when it came to providing relief to millions of hard-working Americans, they did everything in their power to stop it.
“While today’s decision is disappointing, we should not lose sight of the progress we’ve made – making historic increases to Pell Grants; forgiving loans for teachers, firefighters, and others in public service; and creating a new debt repayment plan, so no one with an undergraduate loan has to pay more than 5 percent of their discretionary income.
“I believe that the Court’s decision to strike down our student debt relief plan is wrong.
“But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families. My Administration will continue to work to bring the promise of higher education to every American.
“And later today, I will provide more detail on all that my Administration has done to help students and the next steps my Administration will take.”
