In a significant blow to President Joe Biden, the U.S. Supreme Court delivered a painful defeat on Friday by blocking his plan to cancel $430 billion in student loan debt. The decision, supported by the court's conservatives and written by Chief Justice John Roberts, halted Biden's effort to benefit up to 43 million Americans and fulfill a campaign promise.
President Biden expressed his disappointment with the 6-3 decision and promptly announced alternative measures to provide relief for student loan borrowers. The court's ruling favored six conservative-leaning states - Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina - which had objected to Biden's student loan forgiveness program. This ruling was a setback for the 26 million borrowers who had applied for relief after Biden's plan was unveiled in August 2022 and represented a political blow to the president.
Addressing the public from the White House, Biden vowed to continue the fight for student debt relief, unveiling new steps under the Higher Education Act. He stated, "Today's decision has closed one path. Now we're going to pursue another. I'm never going to stop fighting for you. We'll use every tool to get you the student debt relief you need - and reach your dreams."
Chief Justice Roberts criticized the Biden administration's argument that the loan forgiveness program, tied to the national emergency caused by the COVID-19 pandemic, was merely a modification of an existing program. Roberts highlighted the need for clear congressional approval for such a broad action, stating, "The secretary's plan has 'modified' the cited provisions only in the same sense that the French Revolution 'modified' the status of the French nobility - it has abolished them and supplanted them with a new regime entirely." Roberts referred to U.S. Secretary of Education Miguel Cardona in his statement.
The court's application of the "major questions" doctrine played a significant role in the ruling. This approach grants judges broad discretion to invalidate executive agency actions of "vast economic and political significance" unless they have clear authorization from Congress in legislation. The conservative justices had previously employed this doctrine to invalidate other Biden policies, such as pandemic-era eviction protections for residential renters and the COVID-19 vaccination or testing mandate for large businesses.
A CAMPAIGN PROMISE
President Biden's fulfillment of his 2020 campaign promise to cancel a portion of the $1.6 trillion federal student loan debt has faced criticism from Republicans who argue it exceeds his authority and unfairly benefits college-educated borrowers, neglecting others needing relief. The plan involves forgiving up to $10,000 in federal student debt for individuals earning under $125,000 and who took loans for college education and up to $20,000 for recipients of Pell Grants from lower-income families.
The administration justifies the plan under the Higher Education Relief Opportunities for Students Act (HEROES Act), a federal law enacted in 2003 that empowers the education secretary to "waive or modify" student financial assistance during times of war or national emergencies. Both President Biden and his Republican predecessor, Donald Trump, relied on the HEROES Act to suspend student loan payments and halt interest accumulation during the COVID-19 pandemic.
Education Secretary Cardona announced the finalization of an income-driven loan repayment plan that reduces monthly payments to zero for low-income borrowers while providing annual savings of at least $1,000 for other borrowers and preventing interest from increasing the overall debt burden.
The Education Department also plans to implement a 12-month transition period to support borrowers in resuming loan repayment without falling into delinquency or default. This initiative mitigates severe consequences like negative credit reports and debt collection referrals resulting from missed, partial, or late payments.
President Biden, who is running for re-election next year, criticized Republican officials who opposed his debt relief plan, highlighting their support for substantial pandemic-related loans to businesses, including their own.
According to a March Reuters/Ipsos U.S. poll, 53% of respondents supported Biden's debt relief, while 45% opposed it.
The "major questions doctrine" arises from a conservative and business groups' perspective seeking to limit what they perceive as overreach by the "administrative state." They argue that the executive branch has amassed excessive power without adequate checks from the courts and Congress.
Justice Elena Kagan, in a dissent joined by her liberal colleagues, criticized this doctrine as "made-up," questioning its legitimacy. She argued that the statute, read as written, grants the Secretary broad authority to address the impact of a national emergency on borrowers' ability to repay student loans.
Although two individual borrowers challenged the plan's eligibility requirements, the justices dismissed their lawsuit on Friday, citing a lack of legal standing.
