U.S. Supreme Court rejects Biden's plan to eliminate $400 billion in student loan debt
WASHINGTON — A sharply divided Supreme Court on Friday effectively killed President Joe Biden’s $400 billion plan to cancel or reduce federal student loan debts for millions of Americans. “This fight is not over,” he said.
The 6-3 decision, with conservative justices in the majority, said the Biden administration overstepped its authority with the plan, and it leaves borrowers on the hook for repayments that are expected to resume in the fall.
The court held that the administration needed Congress' endorsement before undertaking so costly a program. The majority rejected arguments that a bipartisan 2003 law dealing with national emergencies, known as the HEROES Act, gave Biden the power he claimed.
Biden, who once doubted his own authority to offer student loan forgiveness, said later Friday he would push ahead with a new debt relief plan while blaming Republican “hypocrisy” for the decision that wiped out his original effort.
The president said he would work under the authority of the Higher Education Act to begin a new program designed to ease borrowers’ threat of default if they fall behind over the next year.
The Supreme Court ruling was blunt in rejecting Biden's first plan.
“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.
Justice Elena Kagan, wrote in a dissent, joined by the court’s two other liberals, that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.” Kagan read a summary of her dissent in court to emphasize her disagreement.
Roberts, perhaps anticipating negative public reaction and aware of declining approval of the court, added an unusual coda to his opinion, cautioning that the liberals' dissent should not be mistaken for disparagement of the court itself. ”It is important that the public not be misled either. Any such misperception would be harmful to this institution and our country," the chief justice wrote.
In South Florida, federal and state legislators mostly condemned the high court's ruling.
U.S. Rep. Frederica Wilson, a Democrat from South Florida, called it “deeply disappointing.”
Said Wilson: “This decision perpetuates inequality and lays bare the double standard of economic assistance in this country: Banks get billions in bailouts while debt-ridden students get nothing.”
State Sen. Shevrin Jones, a Democrat from Miami Gardens, said in a statement that the ruling will mean “millions of Americans will be less economically secure, less free, and less able to access opportunities this country ought to afford everyone, regardless of circumstances.”
Democratic U.S. Rep. Maxwell Frost, of Orlando, who is the first Gen Z member of Congress, lashed out at the high court’s conservative majority.
“Once again, today the conservative-leaning Supreme Court has gotten it wrong and actively chosen to discriminate against working Americans and student borrowers,” he said.
He said the Biden administration should use the “many tools at their disposal to help borrowers."
Florida Republican U.S. Sen. Rick Scott applauded the court’s ruling, saying it “simply reflects common sense and an accurate reading of the Constitution — two things that Joe Biden is incapable of.”
“Hardworking Americans like plumbers and welders should not subsidize the law school bills of elite lawyers," said Scott. "We all know it.”
The forgiveness program would have canceled $10,000 in student loan debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically demonstrate more financial need, would have had an additional $10,000 in debt forgiven.
Twenty-six million people had applied for relief and 43 million would have been eligible, the administration said. The cost was estimated at $400 billion over 30 years.
WLRN news staff contributed to this story.