US Supreme Court deals a blow to Biden student debt cancellation plan
4 Min Read
The US Supreme Court blocks Joe Biden's plan to cancel $430 billion worth of student loan debt.
-
Some 2020 graduates in Columbia University pose for photos on Commencement Day on Wednesday, May 20, 2020, in New York (AP)
President Joe Biden suffered a severe setback on Friday when the US Supreme Court rejected his proposal to forgive $430 billion in student loan debt, which could have benefited up to 43 million Americans and fulfilled a campaign pledge.
The validity of President Joe Biden's proposal was to be decided by the US Supreme Court on Friday.
In an effort to lessen the financial weight of education that continues to linger over many Americans decades after they have completed their studies, the court ruled that Biden had overstepped his authority when he canceled more than $400 billion in debt.
As they mulled the legal challenges brought by six conservative-leaning states - Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina - as well as two individual borrowers, the conservative justices during the case's February arguments indicated doubt about the scheme.
Responding to the decision, a White House source said President Joe Biden "strongly" disagrees with the US Supreme Court's ruling ending his plan to forgive billions of dollars in federal student loans.
"While we strongly disagree with the court, we prepared for this scenario," said the official, speaking on condition of anonymity.
"The president will make clear he's not done fighting yet, and will announce new actions to protect student loan borrowers," the source added.
"We'll also be making it crystal clear to borrowers and their families that Republicans are responsible for denying them the relief that President Biden has been fighting to get to them," said the White House official.
The case has high stakes for 26 million US borrowers who applied for relief after Biden declared the plan in August 2022 until last November, when lower courts blocked it. It is one of two significant rulings the justices are expected to make on the final day of decisions for their term, which began in October.
Read more: Bloomberg: Biden administration set to announce student loan relief
Republicans slammed Biden's plan as his authority's overreach and college-educated borrowers' unfair benefit, while other borrowers received no such relief. It did fulfill his 2020 campaign promise to dismiss a portion of the $1.6 trillion in federal student loan debt. The next year, the US President plans to run for office again.
According to the proposal, the government would cancel up to $10,000 in federal student debt for those earning less than $125,000 who took out loans to pay for college or other post-secondary education, as well as $20,000 for Pell Grant awardees who come from lower-income families and attended post-secondary institutions.
Biden's administration claimed that the program was permitted by a 2003 Higher Education Relief Opportunities for Students Act, or HEROES Act, which gives the US education secretary the authority to "waive or modify" student financial assistance in times of war or other national emergencies.
In order to regularly delay student loan payments and stop interest from piling during the Covid-19 pandemic, both Democratic Vice President Joe Biden and his Republican predecessor Donald Trump used the HEROES Act beginning in 2020.
A Justice Department attorney presented the debt relief during the hearings as a welfare program rather than an assertion of regulatory authority not granted by Congress.
A federal judge in Missouri determined in October 2022 that the states lacked the legal standing to sue in response to their legal challenge. At least one of the states, Missouri, had the right standing, according to the 8th US Circuit Court of Appeals, which has its headquarters in St. Louis.
A federal judge in Texas ruled in 2022 that the plan exceeded the authority of Biden in the case brought by borrowers like Alexander Taylor and Myra Brown; the 5th US Circuit Court of Appeals, which has its headquarters in New Orleans, declined to stay the decision pending an appeal.
According to a March Reuters/Ipsos poll, 53% of Americans support Biden's debt relief plan, while 45% oppose it. Respondents were starkly divided along partisan lines, with Democrats mainly in favor and Republicans generally against.
