On Friday, the Supreme Court ruled against the Biden administration’s Student Loan Forgiveness Plan. This plan would’ve allowed debt cancellation for over 46 million American citizens. This plan has ultimately disappointed not only the Biden Administration but also the citizens heavily impacted by Covid-19 and are struggling with outstanding debt. The plan would’ve allowed eligible borrowers to cancel up to $20,000 dollars in debt for individuals who made under $125,000 a year in 2020/21. Biden’s presidential election campaign in 2020 highlighted this cancellation encouraging many young voters to support his candidacy; thus, this cancellation is disappointing to many Biden voters who hoped this campaign promise would pass while Biden is in office.
Student Loan Forgiveness Verdict
Biden’s Plan was ruled against by a 6-3 majority vote by the Supreme Court with Justices Sonia Sotomayor, Kentanji Brown Jackson, and Elena Kagan dissenting. Justice John Roberts writing on behalf of the conservative supermajority states that the main problem is that Congress needed to have direct authorization. The Student Loan Forgiveness Plan would’ve helped wipe away nearly $10,000 for individuals making under $125,000 and twice as that for Pell Grant recipients who demonstrate more financial need. However, conservative majority in the Supreme Court say that the attempt to cancel student debt is unlawful according to a legal theory called the Major Questions Doctrine.
Supreme Court Blocks Student Loan Forgiveness Plan With The Major Questions Doctrine
The court ruled against Biden’s student loan forgiveness plan under this legal theory called the Major Questions Doctrine. This theory states that Congress must give specific authority to an executive agency or agencies when the result is of major economic or political consequence.
Justice Kagan in reference to the doctrine calls it a fake doctrine and made up. She also states that the states challenging the student loan forgiveness plan had no authority to do so. She writes, “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…The plaintiffs in this case are six States that have no personal stake in the Secretary’s loan forgiveness plan.”
Nonetheless, the Supreme Court abided by this theory and struck down the Biden administration proposal saying that he could do this under a law called the HEROES Act or Higher Education Relief Opportunities for Students Act. This Act grants the U.S. Secretary of Education authority to waive recipients of student financial aid programs under Title IV of the Higher Education Act of 1965, if there is a national emergency. However, again this can’t be done simply through presidential sign off.
What Do Politicians And Professionals Have To Say About The Blocking?
Senator Elizabeth Warren, a progressive Democrat, states, “This fight is not over. The President has more tools to cancel student debt — and he must use them. 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.”
Senate Majority Leader Chuck Schumer says, “The Biden administration has remaining legal routes to provide broad-based student debt cancellation.”
Joe Biden himself even blames the Republican Party as they challenged the plan as soon as it hit the Supreme Court. Biden said in an interview on Friday that the Republican Party supported a plan that cost more than $700 billion dollars while his plan will only cost $400 billion dollars.
“I think that the partisanship that has tied up this issue is really getting in the way of making progress for the benefit of the majority of Americans.” said Colin Pears, an associate provost for student success at the University of New England
What Will This Block Mean?
Due to the Covid-19 pandemic, student debt payments were paused; however, these payments will resume this October. This means millions of citizens will have to start paying monthly payments for debt that incurred while in college. Many people may still be recovering from the economical impacts of Covid-19, but nonetheless payments will resume. Democrats are pressing the Biden administration to take alternative actions to continue to keep his promise of student loan forgiveness. Biden himself says that he will continue the fight against the Republican Party and will take action under the Higher Education Act of 1965. Biden warns this may take a longer route and may require action in a possible second term.
There are other options to student loan forgiveness that the Biden administration lists in their Fact Sheet which many people can take as an alternative to the student Loan forgiveness plan. One of the options to student debt relief that the Biden administration has set up is offering a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024. This is for the most vulnerable borrowers who miss monthly payments during this period. This allows recipients to not be considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.
Although many won’t see nearly $20,000 dollars in debt gone, we still have hope that the Biden administration will continue to work to solve this issue for millions of debt holders.