Supreme Court rejects Biden Admin’s $430B student loan forgiveness plan.

Supreme Court Rules Against Biden Administration’s Student Loan Forgiveness Plan

In a stunning blow to the Biden administration, the U.S. Supreme Court delivered a decisive ruling on Friday, declaring that the COVID-era HEROES Act did not grant the White House the authority to student loan forgiveness plan.”>unilaterally forgive federally subsidized student loans.

“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.”

The first case, Department of Education v. Brown, was decided unanimously, with all justices ruling that the two petitioners who were denied debt relief under the program did not have standing to sue the Department of Education. In the second case, Biden v. Nebraska, the court upheld the right of several GOP states involved in the lawsuit to sue the Biden administration, allowing them to present their argument before the court. Chief Justice Roberts bluntly stated in the majority opinion, “Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”

Student loan forgiveness has long been a priority for many Democrats, as 43 million Americans struggle to repay an average of $28,950 in student loans that can take decades to fully settle, according to Forbes. Senator Bernie Sanders (I-VT) gained popularity in both the 2016 and 2020 Democratic presidential primaries by proposing to eliminate all $1.6 trillion in student loan debt without any eligibility requirements, as well as making public colleges and universities free nationwide.

In her dissent, Justice Elena Kagan, joined by Justice Ketanji Brown Jackson and Justice Sonia Sotomayor, wrote, “[T]his Court today decides that some 40 million Americans will not receive the benefits the plan provides, because (so says the Court) that assistance is too ‘significant.'”

The Biden administration’s plan aimed to eliminate $400 billion of student loans for approximately 40 million qualifying Americans earning less than $125,000 or couples earning less than $250,000. The Department of Education’s online form allowed approved applicants to receive up to $10,000 in loan forgiveness, with Pell Grant recipients eligible for up to $20,000, as reported by The Hill. Around 26 million Americans completed the form, and 16 million were accepted before the Supreme Court terminated the plan, halting the forgiveness of their debts.

The administration argued in court that the plan was authorized by the HEROES COVID-relief Act passed in 2021, as well as a statute in the Higher Education Relief Opportunities for Students Act of 2003, which supposedly allows the Department of Education to waive and/or modify student loans in response to a national emergency, such as the COVID pandemic.

In response to this claim, Chief Justice Roberts remarked that the Biden administration had modified the aforementioned statute “in the same sense that the French Revolution ‘modified’ the status of the French nobility — it has abolished them and supplanted them with a new regime entirely.” Roberts ruled that the statute had been stretched far beyond its intended scope and that a mass-cancellation program of this magnitude required specific congressional approval to proceed, according to The Washington Post.

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