WASHINGTON (NewsNation) — The Supreme Court on Friday struck down President Joe Biden’s hallmark student debt relief plan. In response, the president vowed to use the Higher Education Act to forgive student loans.
In a 6-3 vote, the Court ruled the HEROES Act did not authorize the secretary of education to cancel $430 billion of student loan principal.
In response, Biden vowed to continue fighting for student loan relief that was “snatched away” by the Court. The president announced new efforts to ease the burden of student loans and lashed out at Republicans who have sought to block student loan forgiveness in Congress and through the courts.
Chief Justice Roberts issued the opinion for the majority in Biden v. Nebraska, writing that the HEROES Act authorized the education secretary to “waive or modify” existing statutes related to financial assistance but “not to rewrite that statute from the ground up.”
“The Secretary’s new ‘modifications’ of these provisions were not ‘moderate’ or ‘minor.’ Instead, they created a novel and fundamentally different loan forgiveness program,” Roberts wrote.
Justice Elena Kagan authored the dissent, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson. Kagan called the decision to even hear the case “overreach,” writing “Under Article III of the Constitution, a plaintiff must have standing to challenge a government action. And that requires a personal stake—an injury in fact. We do not allow plaintiffs to bring suit just because they oppose a policy.”
She also accused the majority of falling back on the “major questions doctrine,” a policy that began appearing in opinions in 2022, which allows the Court to reject an agency’s regulatory authority when it comes to issues of major “political or economic” significance.
“So the majority resorts, as is becoming the norm, to its so-called major-questions doctrine. And the
majority again reveals that doctrine for what it is — a way for this Court to negate broad delegations Congress has approved, because they will have significant regulatory impacts. Thus the Court once again substitutes itself for Congress and the Executive Branch — and the hundreds of millions of people they represent — in making this Nation’s most important, as well as most contested, policy decisions,” Kagan wrote.
In his address, Biden announced he would continue efforts to forgive debt. He cut the maximum payment to 5% of a borrower’s disposable income, down from 10%, with the balance of the debt forgiven after 20 years of consistent payments. He also announced borrowers who miss payments when they resume this fall would not be referred to credit agencies, a program set to last for 12 months.
Biden said he will continue to fight to get loan forgiveness for borrowers as fast as possible, using the 1965 Higher Education Act. He acknowledged the plan would take longer, but said he believes it is legally sound.
The president lashed out at Republicans, accusing them of snatching the money from the hands of millions of Americans because they couldn’t stand the thought of helping working Americans. He called out Republicans who got large loans under the Paycheck Protection Program during the pandemic, which were later forgiven.
Biden also noted Republican efforts to make a tax cut for the wealthy permanent, while refusing to support loan forgiveness for those making less than $125,000 per year.
The plan forgave up to $10,000 in federal student debt for borrowers and doubled the debt relief to $20,000 for borrowers who also received Pell Grants and make less than $125,000 per year. About half of the average debt held by Black and Hispanic borrowers would have been wiped out, according to the White House.
In February, during oral arguments, the Supreme Court seemed to cast doubt on whether the Biden administration had legal authority to cancel billions of dollars in student debt. Six Republican-led states also filed a legal challenge questioning whether the president, a Democrat, has the authority to forgive the debt.
Regardless of the court’s decision, payments are coming due for borrowers. Student loan interest begins accruing on Sept. 1 and payments resume in October. More than 40 million Americans will have to start making federal student loan payments again at the end of the summer under the terms of a debt ceiling deal approved by Congress.
Even before the court’s decision, the partisan divide was back in the spotlight as Democrats and Republicans readied new proposals, from free college to targeted debt relief.
The idea of free college has long been pushed by progressives as the end goal of fixing the student loan system, while proposals for student debt forgiveness offer temporary relief to borrowers.
Republicans reject the ideas of both student debt relief and free college, saying they are unfair to those who do not want to attend the institutions or have already paid off their obligations.
The Court also heard the case of two Texans who claimed they were injured by being declared ineligible for compensation under Biden’s proposal. In a unanimous ruling Friday, the Court found they did not have standing to sue.
The Hill and The Associated Press contributed to this report.