The Supreme Court invalidated Biden’s student loan debt relief plan, and a campaign trail promise will not go into effect.
Biden’s Student Loan Forgiveness Squashed
By a vote of 6-3, the justices ruled that the Biden administration overstepped its authority last year when it announced that it would cancel up to $400 billion in student loans.
The Biden administration had said that as many as 43 million Americans would have benefitted from the loan forgiveness program; almost half of those borrowers would have had all of their student loans forgiven.
Supreme Court Blocks Cancelling Student Loan Debt
In a separate unanimous decision, the Court found that two loan borrowers who challenged the plan did not have the legal standing to sue over their exclusion from the proposed relief plan.
The student debt relief plan relied on the HEROES Act, a law passed after the Sept. 11 attacks that give the Secretary of Education the power to respond to a national emergency by “waiving” or “modifying” provisions governing federal student loan programs so borrowers are not placed in a worse financial position during an emergency.
The six states have argued that the HEROES Act does not allow the Department of Education to implement the plan and that states, loan lenders, and servicers will suffer financial losses because of the cancelation.
White House Makes A Statement
“While today’s decision is disappointing, we should not lose sight of the progress we’ve made — making historic increases to Pell grants; forgiving loans for teachers, firefighters, and others in public service; and creating a new debt repayment plan, so no one with an undergraduate loan has to pay more than 5 percent of their discretionary income,” Biden said in a statement. “I believe that the Court’s decision to strike down our student debt relief plan was wrong. But I will stop at nothing to find other ways to deliver relief to hard-working middle-class families.”
Biden said that he would announce new actions on student loans later on Friday afternoon.
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