In a landmark decision released on June 30, the Supreme Court ruled 6-3 that the Biden administration’s student loan debt relief program cannot proceed, arguing that the federal law does not permit the Secretary of Education to cancel more than $430 billion in student loan debt.
Chief Justice John Roberts wrote for the majority, “The Secretary’s plan canceled roughly $430 billion of federal student loan balances,… We agree with the six states that sued, arguing that the HEROES Act does not authorize the loan cancellation plan.”
While the Biden administration disputes the court’s decision and is anticipated to make an announcement outlining new measures to protect student loan borrowers, Republicans have condemned the initiative for being costly and unfair to those who have repaid their loans or never attended college.
Biden’s proposed initiative, which was on hold due to litigation, planned for the federal government to provide up to $10,000 in debt relief – and up to $20,000 for Pell Grant recipients – for individuals earning less than $125,000 annually. The projected cost of the program to the government was over $400 billion.
The Secretary of Education based the program on the federal HEROES Act, asserting that it provided the power to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs.” However, the court majority refuted this claim, with Justice Roberts asserting that the “modifications” made were too substantial and deviated dramatically from the original intentions of the HEROES Act.
While dissenting from the majority, the court’s three liberal justices, led by Justice Elena Kagan, criticized the ruling, stating, “The majority overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans. I respectfully dissent from that decision.”
As the Biden administration had anticipated the unfavorable ruling, the Education Department has been exploring alternate routes to provide handouts. Concurrently, Senate Republicans have introduced a five-bill package designed to mitigate student loans and the high cost of college, promoting measures to ensure students understand the real cost of college education and limiting loans for programs that do not yield high enough salaries to justify the loans.
Sen. Tommy Tuberville (R-AL) spoke in favor of the Republican proposal, saying, “This would prevent some of the worst examples of students being exploited for profit. It would force schools to bring down cost and to compete for students. What an idea… It would also protect students from getting buried in debt they can never, ever pay.”