The Supreme Court ruled Friday in a 6-3 decision that President Bidne’s student loan forgiveness plan, one which would cost $400 billion, is unconstitutional. Biden’s student loan plan would have provided $10,000 in student loan relief to people making less than $125,000 a year, doubling the amount to $20,000 for Pell Grant recipients.
Chief Justice John Roberts, in the majority opinion, wrote that the president’s plan to cancel hundreds of billions of dollars in student loan debt wasn’t authorized by Congress and so President Biden has no authority to spend that money.
In his words: “The Secretary’s plan canceled roughly $430 billion of federal student loan balances, completely erasing the debts of 20 million borrowers and lowering the median amount owed by the other 23 million from $29,400 to $13,600. Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”
Two separate challenges to the debt forgiveness plan were heard. In Department of Education v. Brown, the court said a pair of private borrowers challenging the loan forgiveness plan did not have standing standing to sue.
The second was Biden v. Nebraska. There, six states sued, challenging the loan forgiveness scheme. The court found that at least Missouri had standing because the program would open a nonprofit set up by the state, called MOHELA. That would cause an estimated $44 million in annual fees for the state, so it had standing. Thus, because at least one party had standing, the court could rule on the plan and nix it.
President Biden, in a tweet about the Supreme Court’s ruling, said, “Providing student loan debt relief to hardworking borrowers is necessary to help them recover from the economic harms of the pandemic. That’s why in our bipartisan budget agreement, I fought to keep it in place.”
Providing student loan debt relief to hardworking borrowers is necessary to help them recover from the economic harms of the pandemic.
That’s why in our bipartisan budget agreement, I fought to keep it in place.
— President Biden (@POTUS) June 4, 2023
In another tweet on the issue, he said, “By freeing millions of Americans from the crushing burden of student debt: More homes would have been bought. More businesses would have been started. More couples would have had the confidence to start families. The Republican elected officials who sued us blocked all of it.”
Then, in another volley of tweets, Brandon said, “In the wake of today’s Supreme Court decision on student loan relief, we need a new way forward. And we’re moving as fast as we can. Here’s what’s next: First, I’m announcing a new path to provide student debt relief to as many borrowers as possible, as quickly as possible, grounded in the Higher Education Act. Just moments ago,@SecCardona took the first official step to initiate this new approach. We aren’t wasting any time. Second, we’re creating a temporary 12-month “on ramp” to repayment. This is not the same as the student loan pause, but during this period – if you miss payments – this “on ramp” will temporarily remove the threat of default or having your credit harmed. This fight isn’t over.”
He also said, “Today, the Supreme Court sided with Republican elected officials, blocking relief to over 40 million working and middle-class Americans. I believe the Court’s decision is wrong – I will not stop fighting to deliver relief to borrowers who need it the most.”
Today, the Supreme Court sided with Republican elected officials, blocking relief to over 40 million working and middle-class Americans.
I believe the Court’s decision is wrong – I will not stop fighting to deliver relief to borrowers who need it the most.
— President Biden (@POTUS) June 30, 2023
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