The Supreme Court recently issued a decision to block the Biden administration’s student loan debt forgiveness. The debt relief plan was estimated to cost taxpayers $400 billion, but the 6-3 ruling prevents Biden from moving forward, stating federal law does not permit the secretary of education to have such authority.
Chief Justice Roberts wrote on behalf of the majority, agreeing with lawsuits from six states that argue the HEROES Act does not grant the power to erase the debt. “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,” Roberts said.
Biden’s original plan to wipe out student debt included forgiving up to $10,000 in debt relief for some borrowers and up to $20,000 for Pell Grant recipients, provided the borrower makes under $125,000 per year. However, the estimated $400 billion this would cost the federal government would be placed on the taxpayers.
Biden pushed for the student loan handouts last August, where the federal government received nearly 16 million applications before the program was placed on hold due to litigation. Republicans objected to the initiative, claiming Biden’s plan was unfair to those who paid for their college education in full, paid their debt, or didn’t attend college. Many also argued the taxpayer isn’t responsible for debt taken on for college.
President Biden disagreed with the Supreme Court’s decision and is set to make an alternative debt relief plan for student loan borrowers. “I will stop at nothing to find other ways to deliver relief to hard-working middle-class families,” Biden stated. Reportedly, Biden will blame Republicans for canceling the debt handout program.
The Biden administration’s argument is predicated on the HEROES Act, which they claimed the law granted the federal government the ability to “waive or modify any statutory or regulatory provision applicable to the student financial assistance programs … as the secretary deems necessary in connection with a war or other military national emergency.”
However, the Supreme Court refuted this argument claiming the Biden administration was stretching the powers provided by the act. “The authority to ‘modify’ statutes and regulations allows the Secretary to make modest adjustments and additions to existing regulations, not transform them,” Chief Roberts wrote in his opinion.
The three liberal justices dissented from the majority opinion, claiming there would be consequences for not enacting the loan handout. However, Republicans have their own plan to combat the high cost of college and the extensive borrowing Americans take on. Senate Republicans seek to educate students on the actual cost of college and to prevent lending to educational programs that result in lower salaries.
Sen. Tommy Tuberville of Alabama said regarding the plan, “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.”
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