US Supreme Court blocks Biden student loan forgiveness plan

The US Supreme Court on Friday ruled 6-3 along ideological lines that President Joe Biden overstepped his authority by introducing a $400 billion (€367 billion) plan to cancel or reduce federal student debt.

Chief Justice John Roberts said the court's conservative majority agreed with six Republican-led states in finding that the president had been mistaken in attempting to use the 2003 Higher Education Relief Opportunities for Students Act to justify his debt relief plan. Also called the HEROES Act, it was designed to help former students who joined the US military after the terrorist attacks of September 11, 2001.

"We agree," wrote Roberts in the majority opinion. "The question here is not whether something should be done; it is who has the authority to do it."

The court's majority said the president should have gone to Congress to get legislative approval for his August 2022 plan.

Court 'misinterpreted the constitution' — Biden

Biden believed the Supreme Court decision "misinterpreted the Constitution."

He announced new steps to provide relief for student loan borrowers vowing the education department would not refer borrowers to credit agencies for 12 months.

"Today's decision has closed one path. Now we're going to pursue another. I'm never going to stop fighting for you," Biden said. "We're going to get this done, God willing."

Though the Trump administration had frozen obligations to repay debt during the coronavirus pandemic, it did not erase them. In August 2022, Biden announced that he intended to forgive up to $20,000 in student debt held by low and middle-income borrowers.

The court said the president did not have the authority to enact such measures, noting that those powers lie solely with Congress. As Justice Neil Gorsuch put it, "Among Congress's most important authorities is its control of the purse."

Currently, roughly 43 million Americans hold $1.3 trillion in federal student loan debt. Many continue to pay those debts over decades. The moratorium on debt payments triggered by the coronavirus pandemic runs out in October, when payments on federal student loans must resume.

Of the 43 million individuals that would be eligible for federal student loan debt relief, 26 million applied for the Biden plan. The cost of the scheme was estimated at $400 billion over 30 years.

Dissenting justices claim court itself is overstepping its authority

Justice Elena Kagan, who wrote the dissenting opinion, claimed that it was the court that was overstepping boundaries by allowing states to bring the case despite their inability to prove that they would be affected, even harmed.

"We do not allow plaintiffs to bring suit just because they oppose a policy," she wrote. "The result here is that the court substitutes itself for Congress and the executive branch in making national policy about student-loan forgiveness."

Kagan said the court's majority, "overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans."

Republican-led states arguing before the court in February claimed the Biden plan would have been a "windfall" for 20 million individuals who would simply have loans they had taken in the knowledge that they would have to pay them back, magically erased — and that, at the expense of non-college educated taxpayers.

Conservative justices voiced sympathy for those arguments at the time.

The Biden administration's representative in the case argued that "delinquencies and default would surge" if the plan was scrapped.

How have both sides reacted?

Progressive Massachusetts Democratic Senator Elizabeth Warren took to Twitter to decry the court.

"More than 40 million hard working Americans are waiting for the help that President Biden promised them, and they expect this administration to throw everything they've got into the fight until they make good on this commitment," she wrote.

Warren went on to say, "The President has more tools to cancel student debt — and he must use them."

Republican National Committee (RNC) Chairwoman Rona McDaniel said: "Biden's student loan bailout unfairly punished Americans who already paid off their loans, saved for college, or made a different career choice. Americans saw right through this desperate vote grab, and we are thankful that the Supreme Court did as well."

js/nm (AFP, AP, Reuters)