The Supreme Court struck down President Biden‘s $400 million student loan forgiveness plan on Friday (June 30). It declared the administration does not have the power to cancel student loan debts.
Supreme Court Ultimately Found Biden’s $400M Loan Forgiveness Plan To Be “Too Significant”
Dissenting Justice Elena Kagan claims that the court ultimately found the amount of the financial assistance to be “too significant” despite Congress authorizing the forgiveness plan.
“Congress authorized the forgiveness plan (among many other actions); the Secretary put it in place; and the President would have been accountable for its success or failure,” Kagan wrote, per the Washington Post. “But this Court today decides that some 40 million Americans will not receive the benefits the plan provides, because (so says the Court) that assistance is too ‘significant.’”
The Associated Press reports that the decision against the plan was 6-3, with conservative justices in the majority and liberal justices in the minority.
Biden Overstepped Authority With Student Loan Forgiveness Plan, Supreme Court Rules
The court decided Biden overstepped his authority when he announced the forgiveness of between $10,000 and $20,000 of federal student loan debt in Aug. 2022.
According to the Associated Press, twenty-six million Americans had applied for relief, but at least 43 million would have been eligible before Friday’s ruling. Experts estimated the costs to come out to $400 billion over 30 years.
Biden had previously argued the Higher Education Relief Opportunities for Students (HEROES) Act of 2003 allowed him to cancel or reduce student loan debt. However, Chief Justice John Roberts countered that the HEROES Act “does not authorize the loan cancellation plan.”
“Six States sued,” Chief Justice John Roberts wrote, “arguing that the HEROES Act does not authorize the loan cancellation plan. We agree.”
The Supreme Court has blocked the Biden administration’s student loan forgiveness plan.
— CNN (@CNN) June 30, 2023
Friday’s Ruling Comes As Loan Repayments Are Set To Resume In October
Meanwhile, loan repayments are set to resume in October. However, interest will start accruing in September, according to the Education Department.
Student loan payments have been on hold since the start of the coronavirus pandemic in 2020. During that time, other emergency initiatives were put in place, such as the eviction moratorium. Conservative Supreme Court justices similarly ended that moratorium in Nov. 2021.
President Biden has since addressed the decision in a statement published on the White House’s official website Friday afternoon.
The president has explained that “this fight is not over.” However, he will share more updates during a formal press conference taking place later on Friday.