US Supreme Court blocks Biden student loan forgiveness
A sign calling for student loan debt relief is seen in front of the Supreme Court as the justices are scheduled to hear oral arguments in two cases involving President Joe Biden’s bid to reinstate his plan to cancel billions of dollars in student debt in Washington, U.S., February 28, 2023. REUTERS/Nathan Howard
WASHINGTON – The U.S Supreme Court handed President Joe Biden a painful defeat on Friday, blocking his plan to cancel $430 billion in student loan debt – a move that had been intended to benefit up to 43 million Americans and fulfill a campaign promise.
The justices ruled against Biden in a 6-3 decision favoring six conservative-leaning states that objected to the policy. The court’s action dealt a blow to the 26 million U.S. borrowers who applied for relief after Biden announced the plan in August 2022 and represented a political setback for the Democratic president.
Chief Justice John Roberts, joined by the court’s five other conservative members, wrote the ruling. The court’s three liberals dissented.
Roberts derided the Biden administration’s argument that the loan forgiveness program was merely a modification of an existing program and noted that such broad action would require clear congressional approval.
“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 wrote, referring to U.S. Secretary of Education Miguel Cardona.
“From a few narrowly delineated situations specified by Congress, the secretary has expanded forgiveness to nearly every borrower in the country,” Roberts said.
The court’s ruling invoked what is called the “major questions” doctrine, a muscular judicial approach that gives judges broad discretion to invalidate executive agency actions of “vast economic and political significance” unless Congress clearly authorized them in legislation.
Biden plans to announce new actions to protect student loan borrowers in the wake of the ruling, a White House source said, speaking on condition of anonymity.
“While we strongly disagree with the court, we prepared for this scenario,” the source said, noting that Biden would have more to say on the subject later on Friday.
“The president will make clear he’s not done fighting yet,” the source added.
Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina challenged Biden’s debt relief. Two individual borrowers had also opposed the plan’s eligibility requirements but the justices dismissed their challenge on Friday due to a lack of legal standing. The court acted on its final day of rulings in its term that began in October.
Twenty-six million U.S. borrowers applied for relief between when Biden announced the plan in August 2022 until last November, when lower courts blocked the plan.
A CAMPAIGN PROMISE
Biden’s plan fulfilled his 2020 campaign promise to cancel a portion of $1.6 trillion in federal student loan debt but was criticized by Republicans who called it an overreach of his authority and an unfair benefit to college-educated borrowers while other borrowers received no such relief. Biden is seeking re-election next year.
Under the plan, the U.S. government would forgive up to $10,000 in federal student debt for Americans making under $125,000 who obtained loans to pay for college and other post-secondary education and $20,000 for recipients of Pell grants to students from lower-income families.
The ruling came a day after the Supreme Court effectively prohibited affirmative action policies long used by U.S. colleges and universities to raise the number of Black, Hispanic and other underrepresented minority students. Biden on Thursday said the court, with its conservative majority, was an institution out of touch with the country’s basic values.
During February arguments in the loans case, Biden’s administration said the plan was authorized under a 2003 federal law called the Higher Education Relief Opportunities for Students Act, or HEROES Act, which empowers the U.S. education secretary to “waive or modify” student financial assistance during war or national emergencies.
The court’s conservative justices had previously used the “major questions” doctrine to invalidate major Biden policies deemed lacking clear congressional authorization. They did so when they blocked the U.S. Centers for Disease Control and Prevention from extending eviction protections for cash-strapped residential renters, stymied Biden’s COVID-19 vaccination-or-testing mandate for large businesses and restricted the Environmental Protection Agency’s power to regulate carbon emissions from power plants.
The major questions doctrine arises from an approach favored by many conservatives and business groups to rein in what they view as excesses of the “administrative state.” They object to what they consider accumulated power by the executive branch without proper checks by the courts and Congress.
Liberal Justice Elena Kagan, in a dissent that was joined by her two fellow liberals, derided the major questions doctrine as “made-up.”
“Small wonder the majority invokes the doctrine,” Kagan wrote. “The majority’s ‘normal’ statutory interpretation cannot sustain its decision. The statute, read as written, gives the Secretary broad authority to relieve a national emergency’s effect on borrowers’ ability to repay their student loans.”
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Both Biden and his Republican predecessor Donald Trump relied upon the HEROES Act beginning in 2020 to repeatedly pause student loan payments and halt interest from accruing to alleviate financial strain on student loan borrowers during the COVID-19 pandemic.
During the arguments, a Justice Department lawyer portrayed the debt relief as a benefits program rather than an assertion of regulatory power not authorized by Congress.
Some 53% of Americans said they support Biden’s debt relief, with 45% opposed, according to a Reuters/Ipsos poll from March, with respondents dividing sharply along partisan lines with Democrats broadly supportive and Republicans generally opposed.
